The economy needs to be primed up to generate a “strong feel good factor”

Overall, the Finance Minister has tried to respond to the very difficult challenges our country is facing today. She has presented a balanced budget in her bid to find solutions to a multitude of problems that afflict our country. Today’s immediate need is to fix the economy, which has been languishing for quite some time. The economy needs to be primed up to generate a “strong feel good factor “, which, I am afraid may not happen soon. People should be willing to increase spending and for that they should feel comfortable with their financial situation. There are many positive aspects in the budget but they are likely to bear fruit after a few years. 

1. Abolishment of the Dividend Distribution tax is a good initiative. Here also stability in the policy is required so that companies can take medium to long term decisions.
2. The proposal to build data centre parks would help the IT sector firms. The tourism sector has great potential which has not received enough attention.
3. The proposal to set up an Investment Clearance Cell is a step in the right direction; however, more focused attention needs to be given to improving the score on “Ease of Doing Business “.
4. Change in the income tax slabs is a plus point (though is a condition) is likely to help in increase consumer spending to some extent. I would have liked to see a statement saying that there would be stability in this policy.
5. The Transport sector and Infrastructure sector has rightly received due attention of the FM with Rs. 1.7 lakh crore and Rs. 100 lakh crore allocated in the budget.
6. The Agriculture sector has received the FM’s attention. The decision to provide stand -alone solar pumps to 20 lakh farmers shows the Government’s commitment to the farmers as well as the environment. The proposal for Indian Railways to set up “Kisan Rail” is in the same direction.
7. There is a continuing commitment to the Swachh Bharat Mission with an allocation of Rs. 12,300 crore. However, it is not clear whether the Namami Ganges Project is included under the Swachh Bharat Programme. If that does not happen it would indeed be a sad day for our country. Preservation of the pristine beauty of the Ganga should be an important priority of the Government because the Ganga is an inalienable part of our age old civilization and also because it has great potential for tourism development.
8. The proposal to set up hospitals in Tier II and Tier III cities under the PPP model is very much appreciated. It would help reduce the pressure on hospitals in the larger cities.
9. The proposal to allow FDI and ECB in the Education sector seems to be an innovative step; however, care has to be taken to ensure that the education sector does not get unduly commercialized. The increase in fees in a large number of higher education institutions has resulted in the sector becoming more and more elitist. Increasingly the more well to do families are in a position to provide good quality education to their children which goes against the philosophy of providing equal educational opportunities to all deserving students.
10. The proposal to get 150 higher education institutions to start apprenticeship schemes is a good one. This would provide training opportunities to young people to develop skills. However, to make it successful the institutions should be given some incentives to train the students seriously. They may be given attractive monetary incentives which may be linked to grades where students need to pass an appropriate skill oriented examination. The proposal to attach a medical college to every existing district hospital need serious thinking to ensure its success. The shortage of doctors and the location of these medical colleges may not be very conducive for producing good quality doctors.