Budget 2022: The government must focus on infrastructure investment and provide a booster dose to the economy, says MBG Corporate Services

The road to development relies on infrastructure that is undoubtedly the backbone of every economy and is a distinguishing factor between developed and developing nations. India is now about a $3.1 trillion size economy and it aims to touch the $5 trillion mark by 2025. To achieve this goal, it is necessary to target a double-digit growth which has to come from all the sectors – manufacturing, trade, services, agriculture coupled with an increase in export volumes. Multiple efforts are needed from several directions but the most important is an investment in infrastructure. Besides, the pandemic has affected economic growth. Private sector investments and private consumption have been falling. The third wave of infection has brought more challenges. Under these turbulent times, the government must focus on infrastructure investment and provide a booster dose to the economy. Infrastructure spending directly contributes to employment and investment besides having a big multiplier effect on any economy. India must scale to new heights in physical, social and digital infrastructure.

Robust transportation
The upcoming budget should target more spending on the country’s infrastructure and aim at resolving bottlenecks in some of the big projects. A clear road map needs to be drawn for the completion of ongoing freight corridor projects, high-speed railway projects to facilitate businesses and the movement of people and goods. The focus on building more roads and railways has been exceptionally high since 2014 and has been one of the foremost factors in alleviating the effect of the pandemic. The government should also focus on improving the productivity of existing stretches, set up more electric vehicle charging infrastructure. More attention should be accorded to high-speed rail and semi high-speed rails, urban transport projects, modernization of stations and signalling systems.


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A humane outlook on social development
Budget 22 should be more humane in its outlook. The Union Budget in 2021 had allocated Rs 2,238,460 million outlay for the healthcare sector and well-being. Our health infrastructure – at primary, secondary and tertiary levels was in bad shape even before the spread of Covid-19. There is inequality where the lower strata income group suffers the most. The pressure on hospitals and healthcare centres at one point in time seemed insurmountable as healthcare workers worked round the clock. The budget must allocate greater outlays for the health sector – both preventive and curative. Similarly, several aspects of the current education system need a fresh outlook especially education for school-age group children. Covid has widened the learning gap where both urban and rural poor got the worst hit. An outlay needs to be allocated for new digital tools of learning and internet access for the poor else the gap shall become permanent. The education sector was allotted a Rs 932,240 million outlay through the union budget of 2021. The current government must lay greater emphasis on taking pre-emptive measures and introducing more schemes in both the education & healthcare sectors.

Aiming at a digitally wise economy
India has made massive progress in the creation of digital infrastructure in the last two decades. India has the most number of internet connections in the world except China. Digital technology has changed our lives especially since the outbreak of pandemic in the last two years. It is changing the common man’s life and outlook, governments functioning and even election campaigns looking at the recent policy of campaigning for the upcoming legislative elections in a few States which probably will also feature and be adopted in future. But still many people lack internet access due to power shortage, rural electrification, poor network. It is important to thread together the entire country including rural areas through seamless connectivity which will also boost and achieve the Smart City missions at a greater pace.

The technology sector’s expectation from the Budget is huge considering its indelible impact on our daily lives. There is an urge to experience a paperless economy following the rise of many fintech startups that relieved the common man from always having to carry cards and currency in his pocket. It is important to expand telecom network and connectivity coupled with research and innovation in this field for building digital infrastructure. A proper road map should be laid for expanding the 5G network across India for high speed, better access and faster transactions. An introspection of the “Make in India Policy” is required along with tax concessions and a better regulatory framework to encourage domestic enterprises to consider venturing in technology manufacturing. With the government equally interested in lending a digital footprint to India’s paper-and-pen economy, it is estimated that it would prioritize a budget and extend policy support to ensure technological advancements and build digital infrastructure which can support businesses, their supply chains, marketing networks and common man so that collectively the country can benefit and augment its stake in digitization in every sphere of life.

While we may have a lot of hopes and expectations from the government, we cannot ignore the palpable constraints and challenges it is facing. It all depends on how this government can collect more through taxes and disinvestment receipts and direct them towards presenting a fair budget that helps and satisfies all.

Knowledge partner of Budget 2022: MBG Corporate Services

For any queries, get in touch with MBG Corporate Services communications@mbgcorp.com

The author is Piyush Pandey, Executive Director, Regulatory and Advisory Services, MBG Corporate Services, Gurugram, Haryana. Email: info@mbgcorp.com