A few days ago, if you asked any thinking individual what was expected from the finance minister beyond all the hype and hoopla of expectations, three elements would be sure to figure -- a concerted skills and job creation effort, strong focus on infrastructure and rationalisation of taxes. To a large extent Finance Minister Jaitley has indeed delivered on all three.
On the skills front, the biggest concern in recent times has been the distribution of the skills effort across multiple ministries. The specific mention of centralising all these efforts under the newly minted skills and entrepreneurship ministry and the focus on a National Skills Mission will help clear some of the cobwebs. Further, the announcement of the Self Employment and Talent Utilisation initiative and the initial outlay of Rs 1000 crores should help to create young job-givers across the country.
Infrastructure has been given the biggest gainer of the budget along with education and healthcare and with a resolve to address the public-private partnership snafus that ailed investments on the ground in the past. And the tremendous progress that has been made in tax rationalisation for foreign investors and the postponement or GAAR and making it prospective rather than retrospective will surely gladden the hearts of the investor community.
All credit to the finance minister for walking the fiscal and expectation tightrope extremely well in his budget speech. While the corporate sector should be happy, with the exception of the increase in excise, service taxes and corporate taxes, the focus on the poorer sections of the country is creditable.
The universal social security system and the availability of affordable insurance and special facilities for women, the elderly and the differently abled will all enable a wider redistribution of the budget largesse.
However, there are still some areas that have not got the attention they deserve. Digital India is one of these. Apart from a commitment to the national optical fibre network and its implementation in Andhra Pradesh and Telengana and eventually in the east and north-east, there is an opportunity missed to massively fund the National Broadband Mission, the National Digital Literacy Mission and downstream initiatives like IT enabled manufacturing and smart cities to create the base for a country wide digital environment.
The mitigating factors are the Janadhan Aadhar Mobile initiative and the Electronic Trade Receivable Exchange and the e-business portal, which are all digital initiatives in the right direction and the large outlays for education, healthcare and defence will create opportunities for further digitalisation.
And of course the continuing focus on the Delhi Mumbai Industrial Corridor Development Corporation will provide opportunities for expanding data centres across the country to support the large ‘Make in India’ centres of excellence.
The IT industry itself, in spite of the generous mention of its global prowess by the finance minister, will see the Budget as mixed bag. There were three major expectations -- rationalisation of the tax on SEZs and the elimination or at least reduction of the minimum alternate tax, easing out the multiple knots in e-procurement by the government, and a comprehensive welcoming and enabling environment for global IT majors and start-ups to ensure that India emerged as the preferred destination for all IT investments.
The promise of easing out e-procurement by the government and the commencement of the Self-Employment and Talent Utilisation initiative with an initial allocation for the start-up community are all good steps in the right direction.
However, the much awaited elimination or reduction of MAT on SEZs has not happened and while foreign funds have found some much-needed relief, the financial environment remains sub-optimal for angel investors and domestic VCs.
On the vision side, there is much to be appreciated. We will all be proud to be part of the fastest growing economy in the world if 8.5 per cent growth is registered in the coming fiscal, and the plan to attain double digit growth is inspiring.
The 2022 India@75 vision with every Indian having a roof over the head and a clean and education oriented environment with jobs and entrepreneurial opportunities available for all is something every Indian should be happy about, irrespective of social or economic strata.
And if there is a balanced approach and focus on all the sectors -- manufacturing, services and agriculture -- and a concerted attempt to create the physical, digital and social infrastructure in every part of the country that could attract and retain the best of domestic and global talent and management, we can truly see the country of our dreams emerge in eight years.
And we can then look back and say -- Jaitley’s 2015 budget was the beginning!
Image: Finance Minister Arun Jaitley addresses a post-Budget press conference in New Delhi on February 28, 2015. Minister of State for Finance Jayant Sinhait is to his right. Photograph: PIB.
Dr Ganesh Natarajan is CEO of Zensar Technologies and Chairman of NASSCOM Foundation.
The masterclass and the Budget
Jaitley's speech peppered with digs at UPA rule
India Inc cheers corporate tax cut, wealth tax abolition
Arun Jaitley: 'I am not looking for headlines'
Budget unveils initiatives to boost growth, empower India