For India to become a global manufacturing hub, it needs to increase ease of doing business, promote research and innovation, skillThe Budget proposals are a step in the right direction in this regard. Steps towards plug-and-play driven industrial development, operationalisation of the Anusandhan National Research Trust, development of industrial corridors and 12 industrial parks are welcome initiatives.
The Budget addresses the following key issues: Small and medium-sized enterprises Support to MSMEs (Micro, Small and Medium Enterprises) for financing and market access. Significant financial support has been provided to MSMEs through credit guarantee scheme, introduction of alternative risk assessment model for bank lending, increase in MUDRA loan limits and reduction in turnover threshold through TReDS (Trade Receivable Discounting System) platform. The proposal to set up e-commerce export hubs will open new markets for MSMEs and help in expanding exports.
The commitment to introduce factor market reforms in the areas of land, labour and finance through collaborative federalism and incentives to states demonstrates the government’s strong commitment to making Indian manufacturing more competitive. The rationalisation of customs duties on several products and the announcement of a comprehensive review of the customs duty structure over the next six months are also in line with achieving the vision of ‘Atmanirbhar Bharat’.
The strong boost given to the manufacturing sector in the Budget and the continuation of high capital expenditure of Rs 11.11 trillion will have a positive impact on investment and job creation. These are complemented by employment-related incentives with a focus on immediate job creation. employmentThe attractive incentives being provided to first-time employees in the formal sector as well as manufacturing through reimbursement of EPFO (Employees’ Pension Fund Organisation) contributions is innovative and is expected to yield positive results.
The proposal to set up hostels and crèches for working women will also help boost female workforce participation, which is much needed to ensure sustainable and inclusive growth.
The proposed model of a 12-month internship in a premier company, with the government bearing part of the training costs, will help equip young people joining the workforce with practical skills.Overall, the Prime Minister’s Rs 2,000 lakh crore package for five five-year employment and skill development schemes and the allocation of Rs 1.48 lakh crore for education, employment and skill development in 2024-25 are very positive.
The proposal to review agricultural research to increase productivity and climate resilience, and the “Atmanirbharta” strategy for pulses and oilseeds are crucial given the increasing agricultural insecurity in recent years and its severe impact on food security and food inflation. Strengthening farm value chains by establishing large clusters for vegetable production close to major consumption centres is also a welcome initiative. Such measures are essential to reduce food waste, which currently stands at 40 percent.
There will be continuity in the simplification and digitisation of the tax system. The abolition of angel tax and measures to reduce litigation will improve the “ease of doing business”.
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