The underlying theme of Budget 2020 - wealth creation for all - anchored on the 'Sabka Saath, Sabka Vikas and Sabka Vishwas' motto underlines the way forward to build a vibrant economy, propelled by inclusive growth.
As per the Economic Survey, India has fared reasonably well in terms of its rankings. The central government debt has decreased by 3.3% of GDP. The World Bank's Ease of Doing Business rankings has seen India move up by 79 places. In the Global Innovation rankings, India has gone from the 74th to 52nd position.
In the Resolving Insolvency rankings, India has accelerated to the 52nd position, moving up by 56 places, and in the Logistics Performance Index, it has improved its international ranking by 10 points.
The Budget then chooses to capitalise on this performance by tailoring its initiatives to seek better standards of living for one and all, yield more space to the private sector and draw investments, and address climate change.
Given this context, following are my 4 key takeaways:
Learning and responsible development: In the last Union Budget the Finance Minister had announced a new National Education Policy and establishment of the National Research Foundation. This year too while allocating Rs 99,300 Crore for the education sector and Rs 3000 Crore for skill development, the Budget has proposed to set up "National Police University" and National Forensic Science University" - a first for the central government.
The FM also announced attaching a medical college to every existing district hospitals under the PPP model. Further, if the government takes tangible steps to tap External Commercial Borrowing (ECB) which are cheaper than domestically available loans and Foreign Direct Investment (FDI) to develop higher quality education, that could change the entire socio-economic fabric of the country, generating more and improved employment opportunities for those in the productive age group.
Technology to drive new frontiers: New and emerging technologies are set to play a role in these developments, bringing in more efficiency across the board.
"Data is the new oil" and it is true that analytics is changing the way we deal with our lives. It will enable enterprises to skillfully incorporate data in every step of their value chains. The government proposes to bring out a policy to enable the private sector to build Data Centre parks throughout the country.
Quantum technology is opening up new frontiers in computing, communications, cybersecurity with wide-spread applications. It is expected that lots of commercial applications would emerge from theoretical constructs which are developing in this area. It is proposed to provide an outlay of Rs 8000 crore over a period of five years for the National Mission on Quantum Technologies and Applications.
Manufacturing in India: With the Dividend Distribution Tax (DDT) omitted, manufacturing in India comes cheap, providing an incentive to global manufacturers to set up shop on Indian soil - the effective tax rate for existing companies being 25.17% and 17.16% for new companies.
Moreover, the 'zero effect, zero defect' manufacturing policy would be the icing on the cake, as the model aims to achieve high-quality manufacturing that's also green.
So, while India makes an effort to become a global manufacturing hub, the scope of the model spans across all sectors of manufacturing and service industry with a special focus on micro, small and medium enterprises, one of the engines of Indian economic growth.
Fostering entrepreneurship: Startups and innovation go hand in hand. While India's rank in the Global Innovation rankings has moved up to the 52nd position, the number of unicorns too have gone up with India now becoming a seedbed for billion-dollar startups.
India is the third-largest startup ecosystem in the world. So, more startups imply more jobs which gives the government enough reason to defer taxes on ESOPS for the first five years and increasing the turnover threshold for tax holiday to 100Cr.
This coupled with a robust financial system and governance structure underpinned by mutual trust holds out hope for a vibrant, dynamic economy.(The author is Markets Leader - PwC India)