Over the last couple of years, GoI has emphasised the importance of both digital and physical infra with oversized but necessary allocations to this sector. In continuation with the announcements made in the interim budget, the focus on infrastructure has been reiterated with the allocation of ?11 lakh cr – about 3.4% of GDP – to this space. Coupled with viability gap funding and access to funds from multilateral development banks (MDBs), this would help improve financing across the sector.
The budget also looks to fortify the next steps on our path to Viksit Bharat by:
Enabling training and upskilling Employability of college graduates has improved from 34% to 51% in the last decade, leaving significant room for improvement. Echoing the Economic Survey, the budget highlights the importance of public and private sector collaboration in creating a future-ready workforce. Outcome-focused upgrading of ITIs and on-the-job training through internships at top companies should empower the youth to acquire technical and non-technical skills. Likewise, ELIs for new workforce entrants can help create meaningful avenues and help them structure their career paths more effectively.More women in workforce Inclusion is another big theme emerging from the announcements, and bringing more women into the workforce is a key aspect in driving India’s progress. Labour force participation rate (LFPR) for women has risen over the last six years, from 23% in FY18 to 37% in FY23. But there is still a long way to go. Initiatives around skilling for women and developing hostel facilities will create a certain level of enablement. Likewise, with agricultural reforms driving farm productivity, more women from rural India could join the workforce.Focus on MSMEs India continues to strengthen its position as a manufacturing hub, and MSMEs form an integral part of this journey. This is evident from GoI’s pledge to ensure improved access to credit, technological support and regulatory changes to help these enterprises improve their competitiveness in the domestic and export markets.GoI has stepped up as a credit guarantor for MSME loans and has also defined avenues for public banks to extend their support. Developing new credit assessment models and continuing bank credit to MSMEs during their stress period would also help ensure that companies recover from one-time shocks. Additionally, ecommerce export hubs, when combined with the ongoing One District One Product (ODOP) initiative, can provide a fillip to MSMEs and traditional craftsmanship.
Green future The budget also builds on India’s roadmap towards a more sustainable economy. While there is a need for a dedicated climate-budget mapping effort, it reflects an evolving thought process. Recognising consequences of climate change, the budget champions the nation’s energy objectives. Focus on rooftop solar, storage solutions for renewable energy, R&D for the development of nuclear energy, energy efficiency, energy audits and improved access to finance can serve as a pivot to a more extensive energy revolution – aligned with GoI’s objective of attaining energy independence by 2047.
These initiatives, when combined with the Critical Mineral Mission, and exemption or reduction in customs duties, should help create a circular economy of resources and promote sustainable growth.
IBC reforms Continued reforms around IBC, measures to boost total factor productivity and land reforms, combined with the Jan Vishwas Bill 2.0, should create a more conducive business environment in India. Just as these initiatives contribute to the growth of domestic firms, they will also position India as an attractive destination for international investments.
GoI’s focus on policy continuity, improving ease of doing business and empowering people to contribute to national growth is reflected in various announcements. It has accurately identified structural focus areas for key sectors contributing to India’s economy. However, the proof of the pudding remains in the eating. Implementation will be the defining factor.