In terms of digital connectivity, telecom infrastructure has been given a push in this budget. “Our vision is that all ‘public institutions’ at the Gram Panchayat level – such as Anganwadis, health and wellness centres, government schools, PDS or public distribution system outlets, post offices and police stations – will be provided with digital connectivity. So, fibre to the home (FTTH) connections through BharatNet will link 100,000 gram panchayats (local self-government institution at the village level) this year,” said Nirmala Sitharaman, finance minister. It is proposed to provide Rs 6,000 crore towards the expansion of the BharatNet programme in 2020-21.

BharatNet is a grandiose vision of the Government of India (GoI). This telecom infrastructure provider has been set up under the Department of Telecommunications for the establishment, management and operation of the National Optical Fibre Network. It has been conceptualised to provide telecom services and facilitate the delivery of e-governance in rural and remote areas.

Services are also being digitised. As app-based invoice financing loans are to be launched for MSMEs (micro, small and medium enterprises), their execution is being awaited. Smart metering and prepaid meters will be implemented across states by utilities. This is expected to improve billing and collection efficiency. Further advantage would be grid management and the reduction of manpower requirement owing to digitalisation. This will help discoms (distribution companies) lower operating costs.

Knowledge translation clusters would be set up across different technology sectors, including new and emerging areas. For designing, fabrication and validation of proof of concept, and further scaling up technology clusters, harbouring such test beds and small-scale manufacturing facilities would be established.

The budget also promoted agriculture. In an effort to improve farm productivity and ensure better utilisation of resources, the PM-KUSUM scheme will be expanded to provide 20 lakh farmers for setting up stand-alone solar pumps. In addition to that, 15 lakh farmers will be assisted to solarise their grid-connected pump sets. PM KUSUM Scheme is a farmer scheme at a national level. It facilities the installation of solar pumps and grid-connected solar and other renewable power plants.

Along with this, the budget has increased allocations to sectors such as fisheries, dairy processing and poultry. These channels are intended to help diversify farmer incomes.

Again, the farmer outlook is promising as the import duty on farm equipment has been raised. Therefore, the domestic market is expected to open up, especially for products such as tillers and weeders.

The budget also announced the installation of solar projects along the railway tracks, promising additional solar capacity. Implementation will depend on location feasibility, power evacuation and operation and maintenance-related challenges as this project evolves.

“The finance minister had an extremely tight rope to walk, balancing a severely constrained fiscal space with the need for higher government expenditure for boosting investments and consumption. She has done that well in addressing the key priorities while being within the bounds of the Fiscal Responsibility and Budget Management (FRBM) Act,” said Vikram Kirloskar, president, Confederation of Indian Industry (CII).

The announcements related to agriculture especially encourage the states that adopt model laws. This will pave the way for the adoption of the much-needed agri reforms. It will lead to better returns for the farmers as well as enhanced private sector engagement with agriculture.

The budget also carries the promise of a green mission. A move in this direction is the decision to close thermal power plants whose emission levels are higher than the prescribed limit.

Infrastructure outlay has always been a key priority of the government. “The National Infrastructure pipeline, the focus on the transport sector and railways, will not only create jobs, but will also boost productivity and efficiency of Indian businesses. The project creation is being backed by efforts to make infrastructure financing available,” said Kirloskar.

On the manufacturing front, the government’s approach of focusing on developing specific sectors with potential is a welcome move. The proposed national logistics policy and boost to electricity generation by extending the 15 per cent corporate tax option to the sector, will support the manufacturing initiatives. On the external front, reviewing rules of origin under various free trade agreements (FTAs) will address the issue of ‘Indian Industry’ being negatively impacted by imports routed through FTA countries.

As per the CRISIL Research report, ‘A Quiver of Arrows: Union Budget 2020-21’, the national infrastructure pipeline of Rs 103 lakh crore over the fiscal period 2020-25 includes investments in core and allied infrastructure sectors. However, considering the limited number of private players and low risk-appetite of banks, private participation is a key factor in achieving these targets.

The monetisation of 6,000km of roads either via toll-operate-transfer (TOT) or through the recently approved infrastructure investment trusts (InvIT) route would be a funding impetus for road construction by the National Highways Authority of India (NHAI). CRISIL Research expects NHAI to be able to raise Rs 9,000-10,000 crore per year via TOT over the medium term.

What the Budget has done is to increase the basic custom duty (BCD) on various products, e.g. medical devices. Nearly 70-80 per cent of medical devices in India are imported. An increased ‘cess’ (cess is a tax that the government charges over and above the base tax) on BCD will provide an impetus to domestic manufacturers and improve price competitiveness of their products. However, this could increase the cost of medical equipment. The BCD on imported oilseed has also been increased in a bid to boost domestic oilseed production.

Coming to income tax, electronic invoicing is an innovation wherein critical information shall be captured electronically in a centralised system to facilitate compliance and return filing. It will be implemented in a phased manner, starting from this month on an optional basis. 

The budget is also oriented towards job creation and this was reinforced by the publication of the ‘Economic Survey 2019-20’. The survey was prepared by the Department of Economic Affairs under the guidance of Krishnamurthy V Subramanian, chief economic advisor, and was released last week.

The survey laid out a path for the integration of the ‘Assemble in India for the World’ concept into ‘Make in India’, hopefully creating 4 crore well-paid jobs by 2025 and 8 crore by 2030 in the country. This will help focus on labour-intensive exports and thereby create jobs at large scale; efficiently scaling up the banking sector to be proportionate to the size of the Indian economy and track the health of the shadow banking sector, as well as using privatisation to foster efficiency.

“The survey identifies several levers for furthering wealth creation: entrepreneurship at the grassroots as reflected in new firm creation in India’s districts; promote ‘pro-business’ policies that unleash the power of competitive markets to generate wealth as against ‘pro-crony’ policies that may favour incumbent private interests,” stated Krishnamurthy V. Subramanian, chief economic adviser, Ministry of Finance in the preface of the survey.

In terms of digital connectivity, telecom infrastructure has been given a push in this budget. “Our vision is that all ‘public institutions’ at the Gram Panchayat level – such as Anganwadis, health and wellness centres, government schools, PDS or public distribution system outlets, post offices and police stations – will be provided with digital connectivity. So, fibre to the home (FTTH) connections through BharatNet will link 100,000 gram panchayats (local self-government institution at the village level) this year,” said Nirmala Sitharaman, finance minister. It is proposed to provide Rs 6,000 crore towards the expansion of the BharatNet programme in 2020-21.

BharatNet is a grandiose vision of the Government of India (GoI). This telecom infrastructure provider has been set up under the Department of Telecommunications for the establishment, management and operation of the National Optical Fibre Network. It has been conceptualised to provide telecom services and facilitate the delivery of e-governance in rural and remote areas.

Services are also being digitised. As app-based invoice financing loans are to be launched for MSMEs (micro, small and medium enterprises), their execution is being awaited. Smart metering and prepaid meters will be implemented across states by utilities. This is expected to improve billing and collection efficiency. Further advantage would be grid management and the reduction of manpower requirement owing to digitalisation. This will help discoms (distribution companies) lower operating costs.

Knowledge translation clusters would be set up across different technology sectors, including new and emerging areas. For designing, fabrication and validation of proof of concept, and further scaling up technology clusters, harbouring such test beds and small-scale manufacturing facilities would be established.

The budget also promoted agriculture. In an effort to improve farm productivity and ensure better utilisation of resources, the PM-KUSUM scheme will be expanded to provide 20 lakh farmers for setting up stand-alone solar pumps. In addition to that, 15 lakh farmers will be assisted to solarise their grid-connected pump sets. PM KUSUM Scheme is a farmer scheme at a national level. It facilities the installation of solar pumps and grid-connected solar and other renewable power plants.

Along with this, the budget has increased allocations to sectors such as fisheries, dairy processing and poultry. These channels are intended to help diversify farmer incomes.

Again, the farmer outlook is promising as the import duty on farm equipment has been raised. Therefore, the domestic market is expected to open up, especially for products such as tillers and weeders.

The budget also announced the installation of solar projects along the railway tracks, promising additional solar capacity. Implementation will depend on location feasibility, power evacuation and operation and maintenance-related challenges as this project evolves.

“The finance minister had an extremely tight rope to walk, balancing a severely constrained fiscal space with the need for higher government expenditure for boosting investments and consumption. She has done that well in addressing the key priorities while being within the bounds of the Fiscal Responsibility and Budget Management (FRBM) Act,” said Vikram Kirloskar, president, Confederation of Indian Industry (CII).

The announcements related to agriculture especially encourage the states that adopt model laws. This will pave the way for the adoption of the much-needed agri reforms. It will lead to better returns for the farmers as well as enhanced private sector engagement with agriculture.

The budget also carries the promise of a green mission. A move in this direction is the decision to close thermal power plants whose emission levels are higher than the prescribed limit.

Infrastructure outlay has always been a key priority of the government. “The National Infrastructure pipeline, the focus on the transport sector and railways, will not only create jobs, but will also boost productivity and efficiency of Indian businesses. The project creation is being backed by efforts to make infrastructure financing available,” said Kirloskar.

On the manufacturing front, the government’s approach of focusing on developing specific sectors with potential is a welcome move. The proposed national logistics policy and boost to electricity generation by extending the 15 per cent corporate tax option to the sector, will support the manufacturing initiatives. On the external front, reviewing rules of origin under various free trade agreements (FTAs) will address the issue of ‘Indian Industry’ being negatively impacted by imports routed through FTA countries.

As per the CRISIL Research report, ‘A Quiver of Arrows: Union Budget 2020-21’, the national infrastructure pipeline of Rs 103 lakh crore over the fiscal period 2020-25 includes investments in core and allied infrastructure sectors. However, considering the limited number of private players and low risk-appetite of banks, private participation is a key factor in achieving these targets.

The monetisation of 6,000km of roads either via toll-operate-transfer (TOT) or through the recently approved infrastructure investment trusts (InvIT) route would be a funding impetus for road construction by the National Highways Authority of India (NHAI). CRISIL Research expects NHAI to be able to raise Rs 9,000-10,000 crore per year via TOT over the medium term.

What the Budget has done is to increase the basic custom duty (BCD) on various products, e.g. medical devices. Nearly 70-80 per cent of medical devices in India are imported. An increased ‘cess’ (cess is a tax that the government charges over and above the base tax) on BCD will provide an impetus to domestic manufacturers and improve price competitiveness of their products. However, this could increase the cost of medical equipment. The BCD on imported oilseed has also been increased in a bid to boost domestic oilseed production.

Coming to income tax, electronic invoicing is an innovation wherein critical information shall be captured electronically in a centralised system to facilitate compliance and return filing. It will be implemented in a phased manner, starting from this month on an optional basis. 

The budget is also oriented towards job creation and this was reinforced by the publication of the ‘Economic Survey 2019-20’. The survey was prepared by the Department of Economic Affairs under the guidance of Krishnamurthy V Subramanian, chief economic advisor, and was released last week.

The survey laid out a path for the integration of the ‘Assemble in India for the World’ concept into ‘Make in India’, hopefully creating 4 crore well-paid jobs by 2025 and 8 crore by 2030 in the country. This will help focus on labour-intensive exports and thereby create jobs at large scale; efficiently scaling up the banking sector to be proportionate to the size of the Indian economy and track the health of the shadow banking sector, as well as using privatisation to foster efficiency.

“The survey identifies several levers for furthering wealth creation: entrepreneurship at the grassroots as reflected in new firm creation in India’s districts; promote ‘pro-business’ policies that unleash the power of competitive markets to generate wealth as against ‘pro-crony’ policies that may favour incumbent private interests,” stated Krishnamurthy V. Subramanian, chief economic adviser, Ministry of Finance in the preface of the survey.