Finance Minister Nirmala Sitharaman holds the record for delivering the longest-ever budget speech, as well as the shortest-ever budget speech. While presenting her second budget in 2020, as the first female finance minister of India, she spoke for 162 minutes. But this year, her budget presentation lasted only 90 minutes.
Just as Indian Finance Minister Nirmala Sitharaman presented her fourth budget in the lower house of the Parliament on Tuesday, a rat race broke out among the ruling Bharatiya Janata Party (BJP) and the opposition parties to react to it.
While Prime Minister Narendra Modi and all BJP parliamentarians on the treasury benches applauded Sitharaman for presenting a “progressive and people-friendly budget,” the opposition said the “budget offers nothing to the middle classes, youths, farmers or women,” while Congress Leader Rahul Gandhi even called it a “Zero-Sum Budget.”
Citing the numbers, Kumar says that at INR 39.45 trillion ($527 billion), the budget expenditure is 15.3 percent of the projected GDP of INR 258 trillion ($3.45 trillion) for the Financial Year 23 (FY23), whereas, for the FY22, the revised expenditure of INR 37.7 trillion ($504 billion) is 16.2 percent of the estimated GDP of INR 232 trillion ($3.1 trillion).
“Therefore, in other words, the expenditures will be proportionately less than what they currently are slated to be,” he said.
He says INR 39.45 trillion ($527 billion) is based on an 11.1 percent increase in GDP. But if the growth projected for the next year is 8.5 percent, that implies that the inflation rate would be just 2.6 percent, Kumar adds.
“It is also likely to remain at elevated levels due to high energy prices globally. In other words, the figure of total expenditures is not credible,” Kumar emphasises.
The former JNU professor says that the budget lacks coherence, doesn’t take care of the current problems in India, and does not seem to be credible.
But economist Sudhanshu Kumar’s stance differs from the viewpoint of Arun Kumar as he says that the initiatives in the budget are expected to provide further support to the economy to succeed in sustaining the growth momentum.
“The key areas of focus in this budget are infrastructure, agriculture and MSME. The government expects to generate additional employment through additional support to the manufacturing and MSME sectors. However, the higher deficit puts a challenge before the Reserve Bank of India to maintain inflation within target while providing active support to the fiscal policy,” Kumar adds.
Industry Players Hail Budget 2022
The industry experts are of the opinion that this year’s annual budget balances out both the short-term and long-term requirements of the country.
Talking about the budgetary allocations, Automotive Tyre Manufacturers Association (ATMA) Chairman Anshuman Singhania says: “The pro-growth stance of the Budget is unmistakable. The Finance Minister has endeavoured to ensure that the economic recovery process is sustained and accelerated.”
He says the allocation of INR 10.68 trillion ($142 billion) for capital expenditure (including grants) in FY23 is “a quantum jump of almost 3 times the pre-pandemic level that will boost job creation and ensure long term growth of the economy.”
He says that this year’s budget takes care of the specific sectors such as hospitality and education that have been deeply impacted by the pandemic.
Misra points out that the special focus on PM Gati Shakti’s scheme “will have a multiplier effect” on the economy as the government’s target of expanding the road network by 25,000 kilometres through with an investment of INR 200 billion ($ 2.67 billion) in 2022-23 will strengthen the infrastructure at the grassroots level.
He, however, says that the government’s plan of disinvestment could have been elaborated further for clarity of industry.
Electric Vehicles to Get Major Push From Battery-Swapping Policy
Although the key focus area of the budget was the infrastructure, the proposal of a battery-swapping policy for electric vehicles has been rejoiced by the stakeholders.
In order to scale and promote the use of electric vehicles in the country, Finance Minister Sitharaman announced that a policy for the battery as a service or battery-swapping is being prepared and deployed.
In her speech, she said: “For setting up battery stations at a mass level a battery swapping policy will be brought and interoperability standards will be formulated.”
“With this private players will be encouraged to develop sustainable and innovative models for the battery as a service which will increase efficiency in the electric vehicle ecosystem,” the federal minister added.
Applauding the proposal, National Programme Director of Ease of Doing Business Abhijeet Sinha says: “Policy on battery swapping was highly needed for standardisation of batteries to upgrade ‘charging’ with ‘swapping’ facilities for faster adoption and energy-efficient mobility.”
Mumbai-based EV conversion one-stop-shop, which launched India’s First RTO-Approved Electric Conversion Kit for Motorcycles GoGoA1 CEO and founder Shrikant Shinde also lauds the proposal, as he says that this would help in reducing battery component costs in electric vehicles.
“It will also ease concerns over space crunch for expanding EV infrastructure, make EVs more viable and reduce the lower range anxiety for buyers,” Shinde highlights.
He further notices that reaching out to private sector players is a good step taken by the government while adding that the EV sector is still looking forward for a reduction in GST from 18 percent to 5 percent.