Focus on spending

THE Union Budget 2022-23 was expected to offer a road map to spur Covid-hit India’s economic recovery. It has managed to tick some of the boxes. In a bid to sustain a high growth rate, the Budget totalling Rs 39.45 lakh crore has earmarked capital expenditure outlay of Rs 7.5 lakh crore, more than 35 per cent up from the 2021-22 figure. Stepping up spending on infrastructure development is the government’s mantra to boost economic activity, with roads, railways, airports and ports identified as the key engines of growth. The Finance Minister has underscored the role of capital investments in ‘ensuring speedy and sustained economic revival and consolidation by creating employment opportunities and inducing enhanced demand for manufactured inputs from large industries and MSMEs.’

Not surprisingly, the government has refrained from making big-bang announcements pertaining to agriculture, easily the most resilient sector during the Covid years. In light of the year-long agitation that led to the repeal of the three contentious farm laws, the focus is back on the basics: chemical-free natural farming and public-private partnerships for the delivery of digital services to farmers. The technological push is exemplified by the move to promote ‘Kisan drones’ for crop assessment, digitisation of land records and spraying of insecticides. It will be interesting to watch whether this innovative step proves to be a game-changer or a damp squib.

With millions of people rendered jobless during the pandemic, the government has been struggling to restore or generate livelihoods on a large scale. The FM claims that the Production-Linked Incentive scheme — covering key sectors such as pharmaceuticals, medical devices, electronics, food products, automobiles/auto components, etc. — has the potential to create at least 60 lakh job opportunities in five years. That won’t be enough to negate the lingering impact of Covid-induced disruptions, even as the proposals to introduce digital currency and tax crypto assets are welcome, considering how rapidly and widely the online landscape has grown in the virus-ravaged world. All in all, the Budget has zeroed in on the macro picture, resisting the temptation of taking populist steps for short-term gains.

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