The Union Budget presented in Parliament, unusually on a Sunday, is at best, lacklustre. The government has not even made any pretence at populism. Nor is there any big push on any front. Income Tax rules remain mostly untouched this time, but some reliefs in the regulations are evident. More funds have been earmarked for the defence sector, understandably in the context of Operation Sindoor and the somewhat hostile environment in the neighbourhood. Appreciably, the expenses are kept in line with the earnings. Among the highlights, spending is estimated at Rs 53 lakh crore or $600 billion — some four lakh crore more than the previous term. The fiscal deficit has been placed at 4.3 percent of the GDP, down from the 4.4 per cent the previous fiscal. Special focus this fiscal would be on boosting seven strategic sectors – semiconductors, rare earth, electronic components, biopharma, domestic chemical production, capital goods and textiles.
The budget proposals say the “first kartavya” is to accelerate and sustain economic growth by “enhancing productivity and competitiveness, and building resilience to the volatile global dynamics.” Significantly, the gross government borrowings, up to 17 lakh crore, would largely go for assets creation, and less towards current expenses. The defence sector capital expenditure has been increased by 17 per cent, in what also signals a major push for the new military industrial complex for manufacture of defence equipment. Noteworthy is the hike in infrastructure funds to 12.22 lakh crore, against the 11.2 lakh crore last year– an increase by 8.9 per cent, which is cited as the biggest-ever annual hike in this sector. This is a guarantee that the Centre would continue with its infrastructure push with renewed vigour.
Both port and rail connectivity through enhanced infrastructure development with a fund of 10,000 crore for the next five years is supplemented with the plans to develop seven high-speed rail corridors as growth connectors, including Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Delhi–Varanasi and Varanasi–Siliguri. Among the other notable proposals are an outlay of rupees 10,000 crore over the next five years to develop a global biopharma manufacturing hub; an increase in the outlay for electronic components manufacturing scheme to 40,000 crore; the setting up of dedicated rare earth corridors to support mineral-rich states with a view to promoting mining, processing, research and manufacturing; establishment of dedicated freight corridors connecting Dankuni in the east to Surat in the west; creation of five tourism destinations in the five Purvodaya states; a scheme for development of Buddhist Circuits in the north-eastern sector; and launch of 20 new national waterways to transport minerals, and a revision of baggage clearance rules for international travel. Sitharaman, who is credited with presenting nine successive Union Budgets, is right in claiming that the nation’s economic trajectory in the last 11 years was marked by fiscal discipline and sustained growth. The government, she claimed, has chosen “action over ambivalence and reform over rhetoric.” The financial and political stability that the three terms of the Modi government provided the nation was principally due to this fiscal discipline. That’s evident in this budget too, though there’s nothing very inspiring about the present set of proposals.
