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View: If executed well, the Budget will propel demand, jobs and wealth creation

The need of the day is a sustainable growth plan driven by a robust reform agenda. And the Union Budget 2021 did deliver, without the sting of bad taxes. The necessary governmental interventions through the year and in this Budget, have balanced the demand and supply factors which will propel the economy to future growth.

The proposals to boost new infrastructure capex spends will create a sustainable infrastructure base with resultant long-term benefits. One would expect that existing infrastructure would be suitably upgraded and maintained. On the face of it, the enhancement of multi-modal connectivity is essential for a familiar set of reasons: if a working environment or business or community is joined up and connected by physical infrastructure, then people, products and services flow more efficiently.

In the long term, this will reduce the cost of logistics and attract both domestic and foreign investment, providing an impetus to the economy. These proposals, if executed well and timeously, would see demand and employment rise, leading to the creation of wealth for both individuals and the nation.

There is a great example in American history when in June 1956, President Dwight Eisenhower, passed an act to build an Interstate Highway System— producing $6 benefit for every $ 1 of construction, creating a domino effect on industries as varied as housing and construction, retail and hospitality and of course automobiles.

“By not raising taxes, it is clear that the intent is to grow the size of the business pie, rather than focussing on maximising tax revenue from the existing pie.”

— Venkatram

The 130% increase in healthcare allocation is not just the right thing to do, it is the right business thing to do. Providing better nutrition and health infrastructure, will lead to a healthier population which will be result in a productive and happy society.
The government has moved the narrative beyond disinvestment to privatisation. The landmark LIC IPO, and the plans to privatise two PSU banks and a general insurance company are historic decisions, underscoring that the government is not in the business of doing business.

Also, by not raising taxes, it is clear that the intent is to grow the size of the business pie, rather than focussing on maximising tax revenue from the existing pie. In doing so, it has addressed the business interests of both, large enterprises as also small and medium businesses which generate growth, employment and the demand pull that the economy requires.

As we emerge from trying times, a wise budget like this, which gives more than it takes, demonstrates that the government means business, emboldening people to invest. Thereby building trust.

There is little doubt that this is a bold and ambitious budget. Bold due to the vision it outlays and ambitious as it tries to achieve a lot with minimal burden on the common man. It is a healthy, wealthy and wise budget.

The proposals have been made with an intention to not only recover but to grow and thrive. While a high deficit plan with proactive government investment was expected, the devil now lies in the implementable details. Execution has and will always, continue to be the key.

(The writer is CEO, Deloitte India)

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