Finance minister Arun Jaitley’s announcement that India is a $2.5 trillion economy and the world’s fastest-growing, is a heartening one. This sense of optimism was the hallmark of the budget 2018-19 and it encapsulated the vision of a ‘New India’ by 2022. The overarching sense was one of urgency to get the growth of the nation going with empowering sectors with tools for their fillip. The budget was focussed on pushing forward the critical segments of the economy, from infrastructure, micro small and medium businesses, education and skill development to agriculture. The budget is also focussed on rural India, which is understandable, given that jobs creation and electrification of rural regions are already on the government’s agenda. The emphasis on infrastructure development, augmenting power connections and the promotion of ‘housing for all’ by 2022 should augur well for the power industry too.
What sets this budget apart is a clear acknowledgment and embracing of a digital culture and showing how this could be a catalyst for economic growth. The special emphasis on digitisation in this budget with an allocation of Rs. 3,073 crore to digital India mission and the proposal to start a national programme to direct efforts towards R&D in artificial intelligence, robotics and internet of things, among others, will further power the digital economy. Aligned to this is the focus on improving education through technology and digitisation by moving from ‘black boards to digital boards’. The plan to launch RISE-revitalising infrastructure and systems in education by 2022 with an allocation of 1 lakh crore can revolutionise the education system in India.
Driven by technology enhancements the focus on improvement in quality of urban living was reiterated with the additional budget of Rs 2.04 lakh crore for the smart city mission. This will add momentum to the transition of our cities into ultra-modern habitations made efficient with strong technology. With infrastructure needing investments of Rs 50 lakh crore, the magnitude of the mission (as well as the opportunities) is clear. Nevertheless, the Centre needs to keep a close watch on the selected cities and monitor the progress being made by each state. Allocations are just one part, but ground-level implementation is imperative in ensuring the smart cities mission remains on course.
With the focus on future growth which is inclusive, access to energy, housing for all and infrastructure development remained critical too. Access to energy has been one of the key agendas of the government and the commitment to this critical human development index has been strengthened with an allocation of Rs 16,000 crore to the Pradhan Mantri Saubhagya Yojna for electrifying all households will take the nation closer to its goal of energy security. Access to clean energy remains a critical component of this agenda as the budget highlighted.
As for ‘housing for all’, 51 lakh affordable houses already constructed in rural areas and 50 lakh homes in urban zones is very heartening news. Additionally, one crore houses are to be built in rural areas under the Pradhan Mantri Awas Yojana. All of which indicates the government is on track for meeting its ambitious affordable housing goal, which also benefits the power sector.
Development of 35,000 km of the Bharatmala project (allocation of Rs 5.35 lakh crore), introduction of pay-as-you-use systems at toll booths, elimination of unmanned railway crossings, escalators at stations with footfalls of more than 25,000, more trains and stations being built with Wi-Fi and CCTV cameras are other commendable measures to boost the country’s infrastructure.
While the Railways’ capex has been allocated Rs 1.48 lakh crore, a planned and strategic approach to boost railway safety should be priority for making it a robust network. Given the numerous accidents which have occurred during the past year, specific outlays are required towards the installation of modern rail safety equipment and signalling systems. Along the lines of smart cities, the Railways too can embrace smart technologies in a comprehensive manner to boost passenger safety.
While there have been no direct outlays or proposals for the power sector, we expect the government to remain on course in meeting its targets under the power for all programme as well as its mission to increase the clean energy quotient in its overall power output. Lastly, the decision to reduce corporate tax to 25 per cent for companies with a turnover of up to Rs 250 crores (in FY 2016-17) should boost sentiment among SMEs, some allied to the power industry. Overall the budget is going to provide the required fillip to the critical sectors across the economy with a commitment to support them into the future as well.
(The writer is MD & president, Schneider Electric India)