The verdict is out. The Finance Minister has spoken. India saw the unveiling of a growth-oriented budget 2014 which aims to boost businesses. Sreeji Gopinathan, senior director & IT head, Philips India expressed his thoughts on what made the cut for him, and what did not.
India's 2014 budget is development and growth-oriented, which is the need of the hour. However, there is lack of clarity in certain areas where I believe the government could have stressed more on social development and kickstarted the culture shift that the country needs.
What I liked about the Union Budget 2014:
- Overall medium to long term focus to get back to 7 -8 percent growth and reduce fiscal deficit from 4.5 percent to 3 percent by 2017-18. While the rich-poor divide argument is growing, the only way to push them to enter the middle class is by driving growth.
- Focus on creation of jobs by increasing FDI in Insurance, Defense and manufacturing-oriented sectors, committing to 100 smart cities, investment on warehousing capacity, capital for startup companies, investment on highways etcetera. This should benefit sectors like infrastructure, transport, power, consumer goods, e-commerce, startups and tourism.
- The Skill Development Programme shouldn't just be focused on basic skilling, but also aims to improve cross-skilling in order to push up the capability levels of Indian youth so that they can play more effectively in existing sectors and create new sectors.
- Intent for better execution of programs targeted at poor people so that the real beneficiaries get them
- Higher duties on cigarettes and cigars, caution and scrutinized approach towards retrospective tax law changes which creates new liabilities, intent to clean up and modernize trains, stations and facilities and no significant ‘appeasement’ policies.
- Separate Budget for IITs, AIIMS, IIMs, virtual classrooms
- The promise of a sustainable 4 percent growth in agriculture sector
- Commitment to 24 X 7 electricity
What could have been better:
- While there is mention of the poorer sections of society in the union budget 2014, it lacks specificity on social development programs. The government should look for lessons learned from within India from states such as Kerala, TamilNadu, and from abroad. This should go hand-in-hand with economic development initiatives.
- While there is intent to improve MNREGA, there is no clarity on the key improvement areas what the government would like to focus on and how they plan to do it. When they create clarity in the future, apart from preventing misuse, I would like to see that the employment guarantee has allocation across different sectors and incentives for people to uniformly distribute otherwise some sectors would be at a serious disadvantage. If this doesn’t happen, it could have social implications (in addition to economic issues) which would create long term and lasting damage to the society.
- While there is budget allocated towards solar energy, I believe the amount of 100 crore is too low and it is restricted to a couple of states only. If the government wants to take a pilot approach, then they could have clarified the intent by stating the direction and approach for coming years.
- More impetus to high-end educational institutions to partner with industry so that India enters the creed of ‘innovative’ countries. This could have started setting the path of meritocracy in finding and nurturing talent leading to a culture of innovation from India instead of the mad rush behind imported innovation.
What I didn’t like:
- I would like to see awareness and education programs on how to make citizens more responsible around their neighborhood and premises. The government must kickstart a cultural change program so that citizen share responsibility when it comes to cleanliness, reduction of crime etcetera.
- The Vizhinjam port in Kerala is a natural port which could gain commercial power to become a hub and compete with the likes of Singapore & Colombo. It will also benefit the sea shipping companies because the port lies in the sea route. It should have received a special allocation among the government’s proposal to award the development of sixteen new port projects in India.
- There’s a lack of clarity on Goods Sales Tax. Simplification of tax regime is essential to simplify business operations and reduce associated costs.
- No policy towards cleaning up the education sector.