Bhuvan Bhaskar
The Union Budget 2022-23 is unique in that Finance Minister Nirmala Sitaraman has refused to see anything other than the eye of a fish like Arjuna. It was widely believed that in view of the elections in 5 states including Uttar Pradesh, this budget would be full of popular announcements. But let alone the popular announcements, the announcements made in the name of giving general relief to the voters are also needed to be traced with a lens. From the first to the last letter of the budget, the one eye of the fish that Sitaraman has repeatedly targeted is employment. And for this employment, the government has made the medium of development.
Generally, the approach of governments is that to encourage private sector investment, industries are given relief, to increase consumer demand, either debt is made cheaper or goods are made cheaper. But in this budget, Sitaraman has destroyed all the traditions and ordinary multiplication.
Taking the entire burden of investment on the shoulders of the government, the government capital expenditure has been increased by 35.4% to Rs 7.5 lakh crore. This amount is 2.9% of GDP. If we look at it compared to 2019-20, then this increase is 2.2 times. Obviously, the government is going to spend indiscriminately on infrastructure through this huge expenditure and is hoping that the business friendly environment it will create will encourage the industry to invest.
Revealing his target, the Finance Minister said that the next target of the government is to create 60 lakh jobs. All the 4 priorities announced in the budget will become a medium of employment generation in one way or the other. Under PM Gatishakti, roads, railways, airports, ports, public transport, waterways and logistics infrastructure have been made the basis and it has been said to prepare a national master plan for building a world-class modern infrastructure. A master plan will also be prepared for expressways and 25000 km of national highways will be constructed during the next financial year.
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All these projects will not only create employment opportunities on their own, but the entire ecosystem which will develop due to them, will also create lakhs of employment opportunities. The government also announced issuance of interest-free bonds worth Rs 1 lakh crore to the states to ensure they fund capital expenditure. According to the GST Act, from July 2022, states will stop getting compensation for shortfall in tax. In such a situation, the interest-free loan given to them shows the seriousness of the Center for infrastructure projects. And if the grants given by the Center to the states are also included, then the total allocated amount for capital expenditure during 2022-23 will be Rs 10.68 lakh crore, which is 4.1% of the GDP.
Such emphasis on capital expenditure simply means that the government wants to accelerate the economy through the demand side. Therefore, along with PM Gati Shakti, the government has also taken many steps to create a conducive environment for the industries. Reducing the number of compliances, reducing laws, entrepreneurship, e-labor, NCS, increasing efficiency by aligning ASEEM portals, etc. are the steps which are sure to have a positive impact in the medium to long term.
In a way, the extension of tax redemption facility being given to startups for one more year for three consecutive years is also a step in the same direction. More and more startups are created means that more and more jobs will be created. Apart from this, digital infrastructure in small towns and villages and plans to convert Tier 2 and 3 cities into big cities will increase consumption on a large scale, which will have a direct impact on the productivity of industries.
The period of ECLGS i.e. Emergency Credit Line Guarantee Scheme has been extended till March 2023. Along with this, the guaranteed cover has also been increased by Rs 50,000 crore, after which the total cover will now be Rs 5 lakh crore. Additional funds will be given for the hospitality sector (hotels, tourism etc.). The Finance Minister’s announcement on ECLGS is expected to benefit MSME-focused banks and NBFCs as it will reduce their exposure. At the same time, this announcement is also very positive for MSMEs.
It is clear that this budget has been presented for 2022-23, but somewhere behind it a dream of taking the economy to $ 5 trillion (lakh crore) has been seen and concrete steps have been taken to turn it into reality. Huh. Now all the responsibility is on the successful and effective implementation of these budget provisions because only through this India will be able to touch the heights of the economy with employment-oriented development.
(The author is an expert in agriculture and economic matters)