By Kiran Mazumdar Shaw, Chairperson, Biocon
Finance Minister Nirmala Sitharaman has delivered a Budget that ticks several boxes. The Budget focused on maintaining fiscal prudence, improving ease of doing business, boosting infrastructure, and creating a strong digital governance architecture.
The economic gloom caused by the Covid-19 pandemic had raised expectations of a ‘feel good’ budget. The Finance Minister, however, presented a balanced budget and operated with fiscal prudence within her zone of comfort. The Budget provided several upsides, including a 35% ramp-up in capital expenditure outlay, announcement of several big ticket infrastructure projects, continuing PSU disinvestments, 5G spectrum auctions etc. There were certainly no negative surprises which pleased the stock market, with the Sensex responding with an over 800-point rally.
Laying the Digital Roadmap
In this Budget, the FM has set the stage for delivering on the promise of creating a strong digital-led Indian economy by 2047. She has focused on measures to build a strong digital architecture that supports digital governance, e-health, ease of doing business through voluntary compliance and building digital trust. At the same, she talked about investing in digital healthcare and digital education. These are all steps in the right direction because if India is to emerge as USD 5 trillion economy by 2030, we will have to make incremental investments over the years in building a robust digital future.
Digital Health & Pharma
I welcome the decision to roll out Ayushman Bharat Digital Mission and the National Tele-Mental Health Program with NIMHANS as a nodal center and IIIT Bangalore providing technology support for the network of 23 tele-mental health centres of excellence.
The FM has identified Genomics and Pharmaceuticals as sunrise sectors, and promised supportive policies. I hope the government enables adequate investments in innovative pharma R&D, health technology, biotechnology. These sectors hold great promise and will need large investments.
The Budget said the government will promote thematic funds for blended finance with the government share being limited to 20% and the funds being managed by private fund managers. One awaits more details on this. I personally believe research and innovation is critical for spurring exponential economic growth.
While there were concerns that the government would miss its fiscal deficit target of 6.8%, the Finance Minister managed to contain the fiscal deficit to 6.9%. With the deficit pegged to be lowered to 6.4% in the next fiscal year, it is good to see the government sticking to the glide path of fiscal consolidation.
Business as Usual for Corporate India
Indian Inc had expected the FM to lower corporate tax rates. Private investments have sharply declined despite improved financial performance, so some changes in tax rates could have spurred investment in capital expansion. However, Ms Sitharaman was probably constrained in giving tax relief to corporates as the economy is still not out of the woods yet on the pandemic front. Corporate India is comfortable as there are no negative surprises in the Budget, which is good for overall business sentiment.
Overall, this is a Budget that is well balanced with fiscal prudence and ‘ease of doing business’ as the main themes.
A version of this article first appeared in The Times of India on Feb 2, 2022.