Budget Facilitates Ease of Doing Business

Finance Minister Nirmala Sitharaman presented the Union Budget-2022-23 in Parliament on February 01, 2022. Putting the spotlight on the way forward after the Pandemic, the Budget has analysed aspects such as inflation, global liquidity measures and rising energy prices to detail the risks for the economy going ahead. It has also taken stock of growing revenues to indicate the availability of fiscal space. The economic survey has noted that growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth and the possibility to ramp up capital spending. The Survey tabled in the Lok Sabha pointed out that buoyant tax revenues enabled the government to provide additional support to the economy and continue the push in favour of higher capital expenditure. Though output in various contact intensive services remained below pre-pandemic levels, it said the macro-economic strength provided buffers against likely stresses such as withdrawal of stimulus by global central banks. It has projected a modest 8-8.5 per cent growth rate for the next financial year, 2022-23. This is significantly lower than the 9.2 per cent expansion projected by the NSO in its first advance estimates for 2021-22. It is also lower than the 9 per cent growth estimate by the IMF in its World Economic Outlook for the current and the next year. Besides, in FMCG Sector the Budget enhances facilities for doing business.

Budget-2020 aims to facilitate ease of doing business and enhance consumption by providing employment opportunities, boosting infrastructure and focusing on technology. Besides, it will strengthen the foundation of FMCG sector for long terms. Consumer Goods Sector hopes for a long-term recovery from the shadows of the COVID-19 pandemic. It includes to boost demand in the FMCG Sector. An up capex of 35.4 per cent from Rs. 5.54 lakh crore to Rs. 7.5 lakh crore will boost direct and indirect employment. This will help enhance demand over the medium term. The government’s main focus is on medium to longer term measures rather than short term appeasement fixes to drive demand. The Budget has fostered investments to fuel the economic recovery across different classes. It is meticulously balanced and is expected to drive FMCG demand across both rural and urban centres. Higher investments on programs to increase employment such as Gati Shakti, rural digital footprint improvement and infrastructure growth are growth engines. Union Budget-2022-23 places its bet on infrastructure development. It takes a future-ready strong pro-technology, pro-business and green energy stand and estimates India’s GDP to grow at about 9.2 per cent, the highest among all great world economies. It leverages the nation’s sturdy present position and aims to expand it at an extremely macro level. The Budget lays down a framework of bringing prosperity for the whole country, connecting rural India strongly with the rest of the country which is visible in the various allocations being done for rural India. In agriculture, the government is opening channels to boost chemical-free natural farming and leverage Kisan drones towards crop assessment, digitization of land records and pesticides dissemination. There is also an amount of Rs. 2.37 lakh crore worth of MSP direct payments set aside for wheat and paddy farmers- a much needed aid for farmers. PM AwasYojana, PM Gram SadakYojana and MGNREGS will drive the rural economy by creating livelihoods and improving accessibility. MSP payment to 163 lakh farmers and procurement of wheat and paddy will lead to over 237 lakh crore allocation to MSPs. The directive to connect MSMEs such as Udyam, e-shram, NCS and Aseem Portals will widen their scope much further and leverage them as portals with live organic databases providing G-C, B-C, & B-B services such as credit facilitation, enhancing entrepreneurial opportunities, etc. The Budget makes it easy for FMCG companies to move to direct distribution in rural India; with the passage of time, it will further facilitate the expansion of FMCG in rural India. Rural being the key-pillar of growth in the short term and with the structural changes initiated in the Budget, we can see the ‘Rural Bharat’ becoming the key growth pillar for India in the years ahead. The main focus of the Budget is on driving consumption through indirect means. However, it will require rationalization of high inflations through a reduction in prices of oil, fuel, etc. Gati Shakti plan is a constructive plan to remedy the nation’s need for world-class infrastructure, and the PLI Scheme to generate at least 60 lakh new jobs over 9-15 year period is another welcome milestone, after a few challenging economic years. The government has loosened its purse strings for the needy sector. The ramp-up of capital expenditure by 35-40 per cent to Rs. 7.50 lakh crore as well as the upgrade to the credit guarantee trust for micro and small enterprises with the necessary fund injection has added approximately an additional of Rs. 2 lakh crore to MSME’s bounty. The Budget’s provision of increase in allocation for MSPs leading to higher MSPs will ensure strong Agri Produce. However, it does have the effect of taking inflation further up, particularly in the food processing industry where it is a crucial impact factor. Budget-2022-23 envisions an overall development of the country. The launch of urban sector development plans for CoEs with an outlay of 250 crore, formulation of battery swapping policy and others are definitive moves on the part of the government towards progress in every direction and across all mediums. The biggest of all is The One Nation, One Registration Move; it is certainly a dream come true for business people. Further, the directive to the private sector to seek sustainable business models for battery and energy as a service is a welcome move in the green energy direction.