View: Budget is practical, may help the economy to sprint once again

The Union budget 2021 is focused on India's growth and is tailored to revive the Indian economy in a post-Covid world. While the rollout of the vaccine will be the government’s crucial near-term priority, the budget aims to address the demand of industries to spur growth and consumption. It is, overall, a practical budget, and, if implemented well, can be a progressive one, too.

Not surprisingly, bulk of the increases in government spending will be on health infrastructure, incentives for new industries, innovation and R&D, education, and improved governance. This should help generate employment, ensure inclusive growth, create capital formation and provide Indians much needed improvement in overall infrastructure.

The government is going to manage the increased expenditure through higher tax collections led by 11% GDP growth, divestments and borrowings.


The big initiatives planned in the budget to bring the economy back on track are:

Infrastructure impetus
The keen focus on improving rail, road and power distribution infrastructure is a pro-industry move. Development of 8,500 km of highways by March 2022 will enhance competitiveness of Indian industry by lowering the cost of transportation and bettering connectivity between production and consumption markets, both domestic and global.

Manufacturing incentives
The PLI (production-linked incentive) scheme to create global manufacturing champions across 13 sectors, and create world class infrastructure in the textile sector with the creation of seven textile parks over three years.

Comprehensive healthcare support
The significantly large outlay on health infrastructure is a need of the hour, as healthier, well-nourished people is the main plank for a robust economy. The monies are intended to be spent on Covid-19 vaccine, improving nutrition, and setting up integrated public health labs and critical care hospitals, which makes it a comprehensive one.

Rural support
A significantly higher allocation under the Rural Infrastructure Development Fund is a move that will hasten development of infrastructure for agriculture and allied industries and give a fillip to rural connectivity. Rural consumption has stayed relatively strong in the last couple of months and any move to aid this further is a welcome one.

In sum
The budget augurs well for consumption and revival of the economy, to build a resilient Bharat. If implemented well, all the measures highlighted by the finance minister will address the supply side on food and agriculture that will drive domestic demand and consumption. With these measures coming in, I’m hopeful that industries crank up and the economy begins to sprint once again.