Ahead of pre-election Budget, history shows how Modi govt shed populism in the last one

Union Budget 2022, the second post-pandemic budget of the Prime Minister Narendra Modi-led government, emphasised on providing an impetus for growth with an eye on getting ready for India@100. Businesses and corporate leaders described the budget as one with a focus on improving ease of doing business and devoid of populism.

Last year, Finance Minister Nirmala Sitharaman said public investment must continue to lead and pump-prime private investment and demand. Sitharaman sharply increased the allocation of capital expenditure by 35.4 percent from Rs 5.54 lakh crore to Rs 7.50 lakh crore.

“At this stage, private investments seem to require that support to rise to their potential and to the needs of the economy. Public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23,” FM Sitharaman had said in her speech.

The 2022-23 budget also focused on preparing the Indian economy for the future with special infrastructure.

Elaborating on the PM GatiShakti- National Master Plan for Multi-modal Connectivity, the Finance Minister said it is a transformative approach for economic growth and sustainable development.

Announcements for MSMEs:

• 130 lakh MSMEs were provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS) and the scheme was extended up to March 2023. 
• Guarantee cover under ECLGS was expanded by Rs 50,000 crore to a total cover of Rs 5 lakh crore.
• Rs 2 lakh crore additional credit for MSMEs facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).

Sitharaman also extended a concessional tax regime of 15 percent tax for newly-incorporated domestic manufacturing companies under section 115BAB till March 31, 2024. 

The government had also allocated Rs 283.5 crore for the Startup India Seed Fund Scheme. The initiative aims at promoting entrepreneurship and encouraging innovation by creating an ecosystem that is facilitative to the growth of budding entrepreneurs.

On the defence front, the Union government committed to reducing imports and promoting Atmanirbharta (Self-reliance) in equipment for the Armed Forces.

How business world had reacted to Budget 2022-23

Hailing the Budget, Vedanta Resources Executive Chairman Anil Agarwal tweeted, "I congratulate FM @nsitharaman Ji for a growth-oriented and forward-looking #Budget for the masses. It sets the stage for rapid progress post-pandemic."

Biocon Executive Chairperson Kiran Mazumdar-Shaw tweeted, "Fiscal prudence and business ease have been the theme. 35% increase in capital expenditure will drive infra and jobs - positive rhetoric with no negative surprises= balanced budget."

"With today's budget focussed on capex, digital and welfare - I can clearly imagine the future. Today's wordle Budget edition," RPG Enterprises Chairman Harsh Goenka had said.

Mahindra Group Chairman Anand Mahindra tweeted, "Brevity has always been a virtue. @nsitharaman's shortest budget address may prove to be the most impactful."

CII Director-General Chandrajit Banerjee said, "Indian industry welcomes the government's unwavering commitment towards boosting investments, creating jobs, improving ease of doing business, maintaining tax stability and certainty in policy regime through well-designed and prudent measures delineated in the budget."

Finance Minister Nirmala Sitharaman will be presenting her fifth straight budget on Wednesday. This will also be the last full budget of the second term of the PM Modi-led government. Typically, pre-poll budgets at the Centre and states tend to be populist. Whether the current dispensation takes the same route or the road less taken is anyone's guess.