Gati Shakti to fast forward growth

The Annual Financial Statement, popularly known as the Budget for the fiscal year 2022-23 for the country was presented by FM on 1st February 2022 bound by the twin constraints namely, impact on economy due to the pandemic since the past two years; and the forthcoming assembly elections in the politically sensitive state of Uttar Pradesh.

This was also the last opportunity for the government before the next parliamentary general elections, to demonstrate its will for bringing about next generation of reforms.People expecting a slew of Big Bang reforms were disappointed as the emphasis by and large, remained on improved processes. It seems government considers digitisation and automation (faceless tax administration) as a panacea for all ills. Yes, indeed it is necessary condition but not sufficient by itself. Digitisation and automation will yield the desired results only when accompanied with commensurate systemic mindset changes in the bureaucracy. This Budget laid out the following priorities – PM Gati Shakti, inclusive development, productivity enhancement and investment, sunrise opportunities, energy transition and action on climate change. The FM reiterated the resilience and recovery of the economy indicated by the highest ever GST collectionsin the month of January 2022, a little over Rs. 1,40,000 Crores, recorded since the introduction of GST in July 2017. However, thefiscal deficit for FY 2023 pegged at 6.4% of GDP continues to be a cause for concern.

The emphasis on sustainable development and addressing the concerns of climate change, ease of doing business, ease of living etc., are demonstrative of progressive intentions that need to be converted into tangible outcomes. The Government while taking cognisance of the growing clout of cryptocurrencies, announced launching of a Digital Rupee using block chain technology by Reserve Bank of India in the current financial year. Simultaneously, income from intangible Virtual Resources has also been brought under the tax net.

Another interesting aspect brought out during the Budget Speech was regarding the uncertainty in the taxation regime caused by judicial action. The FM mentioned on the floor of the Parliament how orders of certain High Courts treating tax levies for health and education as bonafide business expense are incorrect and against the spirit of the legislation. It is to be seen whether the Revenue Department will continue to raise such demands or wait for the issue being decided by the Apex Court.

PM Gati Shakti launched in October 2021 is one of the important priorities of the Government. This National Master Plan on a Digital Platform Inter Connecting projects of 16 Ministries for Multi Modal connectivity, planning and execution of infrastructure projects to bring down the cost of logistics.

Another redeeming feature was addressing the grouse of States regarding lack of resources. In this connection, the pool of sharable resources with the States has been increased from Rs. 15,000 crores (RE 2021-22) to Rs. 1,00,000 crores (BE 2022-23).

In the direction of "Make in India"and "Atmanirbhar Bharat", defence has been identified as the key sector further opening it up for private investments. The Finance Minister also announced25% of the R&D grants to the start ups. Setting up of International educational campuses to fill up voidin the cutting edge areas is another critical announcement made in this budget.

The time will tell about the success of employment led growth predicted in the budget. To conclude, the budget adequately covered various priority areas in incrementalsteps. However, there were neither any major populist measures nor major reforms/policy shift.

The writer is a former Chief Secretary, Government of Telangana State