Looming Elections: Anticipated Thrust Areas in India’s Interim Budget
With the Lok Sabha elections looming in April-May 2024, the upcoming Union Budget on February 1st will be an interim one, focusing on fiscal stability rather than major policy announcements. Here are some key areas where the budget could make a significant impact:
Boosting Real Estate and Homeownership:
The real estate sector’s recent positive trajectory, marked by increased affordability and larger consumer purchases, warrants further attention. Incentivizing first-time homebuyers and offering supply-side benefits to affordable housing developers could significantly address this segment’s needs. Additionally, increasing the current limits on deductions for interest paid on home loans could reduce taxable income and make homeownership more accessible.
Tackling Food Wastage and Enhancing Agricultural Productivity:
India’s appalling wastage of fruits and vegetables (16.4%), oilseeds (10%), pulses (9%), and cereals (6%) demands immediate action. Emphasizing micro-cold storage networks and packhouses could significantly reduce post-harvest losses and provide farmers with a wider marketing window. Furthermore, bridging the productivity gap between India and China in wheat and rice necessitates proactive efforts. This includes raising awareness about novel technologies among farmers, making necessary tools and implements affordable, and ensuring adequate credit availability.
Infrastructure Development and Digitization:
Increased allocation to infrastructure is anticipated, with a focus on digital India, green hydrogen, electric vehicles (EVs), and broadband expansion. These investments will accelerate India’s technological leap and lay the groundwork for a sustainable future.
Tourism and Job Creation:
Simplified visa processes and targeted marketing campaigns hold the potential to double tourist arrivals within five years, creating significant employment opportunities in the travel and hospitality industry. The budget could consider measures to incentivize this potential.
Startup Ecosystem and E-commerce:
Encouraging innovation and tech adoption through investments in digital infrastructure and tax exemptions for early-stage startups could prove impactful. Additionally, training programs for digital marketing, logistics management, and data analytics can improve efficiency and attract a skilled workforce, potentially creating up to 1 lakh jobs in e-commerce-specific roles.
Manufacturing and Employment Generation:
Expanding PLIs to labor-intensive sectors like apparel, toys, and footwear can boost employment, while focusing on import-substitution PLIs in capital goods and chemicals can reduce dependence on imports. Additionally, incentivizing rural industrial parks closer to planned industrial corridors could promote manufacturing in the hinterland.
Mental Health Awareness and Accessibility:
India’s growing awareness of mental health requires concrete action. The budget could prioritize increasing the number of qualified mental health professionals, particularly clinical psychologists and psychiatric social workers. Furthermore, covering psychotherapy under insurance would significantly improve accessibility to treatment.
Gold Industry Competitiveness:
Enabling international gold suppliers to offer competitive prices to Indian manufacturers through Gift City would provide a much-needed boost to the industry.
Research and Development for Advanced Manufacturing:
Increased budget allocation for R&D activities in high-technology sectors like semiconductors, medical devices, defense and aerospace, clean technologies, and intermediary goods manufacturing can enhance India’s competitiveness in these crucial areas.
In conclusion, while the upcoming budget may not unveil sweeping policy changes, it can still play a vital role in bridging the gap towards India’s next big leap. By focusing on targeted interventions in critical sectors like real estate, agriculture, infrastructure, and technology, the budget can lay the groundwork for a more prosperous and inclusive future.