Analysis Of Kurukshetra Magazine : ”Union Budget 2022-23 – Transforming Industrial Ecosystem”

Relevance

GS 3: Growth & Development, Planning, Inclusive Growth

Introduction

• Union Budget 2022-23 unveiled a long-term blueprint of economic growth for 25 years – ‘Amrit Kaal’ enabling transition of India’s growth from India at 75 to India at 100.
• Amrit Kaal is well articulated with long-term perspectives to (a) focus on growth and all-inclusive welfare (b) promote technology-enabled development, energy transition and climate action and (c) virtuous cycle starting from private investment, crowded in by public capital investment.

4 Strategic Thrust Areas

Budget 2022-23 reinforced its thrust on growth orientation opening up innovative opportunities. Acknowledging that the recovery of the economy is reflective of country’s resilience. Union Budget 2022-23 clearly built around four strategic thrust areas –

(i) PM Gatishakti
(ii) Inclusive development,
(ii) Productivity Enhancement and Investment, Sunrise Opportunities, Energy Transition and Climate action
(iv) financing of investments.

MSME

• The Budget proposes to strengthen at least two of the Aatmanirbhar Bharat components, viz. Udyam and ECLGS.
• The Budget has proposed to link Udhyam Portal to:  National career service, e-shram, ASEEM(Aatmanirbhar skilled employee-employer mapping).
• The budget proposed rolling out of Raising and Accelerating MSME performance(RAMP) over the next 5 years.
• Another announcement is credit augmentation to credit guarantee fund trust for Micro and small enterprises(CGTMSE) to Rs. 2 lakh crore.

Skill Development

Announcement for aligning the National Skill Qualification Framework, the launch of digital ecosystem for skilling and livelihood and ‘drone shakti’ are in line with the Industry’s need.

Capex and infrastructure

• Union Budget 2022-23 is well poised to fast-track the growth walking through the multiplier impact of CAPEX and enhanced infrastructure allocations.
• Effective capital expenditure will be Rs 10.68 lakh crore, or 4.1 per cent of GDP in FY23 while the total expenditure works out to Rs.39.45 trillion during the fiscal.
• Infrastructure growth is designed to be driven by seven engines: Roads, Railways, Airports, Ports, Mass Transport, Waterways, and the total Logistics Infrastructure.
• National Master Plan is aimed at creating world-class modern infrastructure and logistics synergy that is set to create employment and growth.
• Energy transition and climate action will be the major government priority in executing the infrastructure projects.
• The 5 G spectrum auctions are slated to take place during FY 2022-23.
• The laying of optical fibre in rural areas to establish internet connectivity will be implemented by using the private-public partnership (PPP) model and will be executed to complete by 2025.
• The CAPEX during the fiscal is raised from Rs.5.5 trillion to Rs.7.5 trillion with an added allocation of Rs.19500 crores for productivity linked incentives (PLI)for manufacturing in 13 sectors including high-efficiency solar modules that is expected to open up 60 lakh new job opportunities while speeding up the revival of the economy.

Conclusion

The holistic analysis indicates that Budget 2022-23 is eying long-term growth prospects without losing sight on the near-term needs for reviving the growth to bail out the enterprises from the adversities of the ongoing pandemic. What is more significant is the balancing of resources between social sector needs and infrastructure/capex.