By Sharad Kumar Saraf
The Indian economy is set to become the fastest growing economy in 2021. The main plank of growth is Atmanirbhar Bharat (self-reliance across sectors), which requires competitive manufacturing, services and agriculture. All these need massive infra spending to create world-class facilities. The Union Budget proactively moves in this direction. The creation of the Development Finance Institution with a corpus of Rs 20,000 crore for infra financing is the need of the hour, and then monetising it, like dedicated freight corridors, airports, etc, so that flow of capital is ensured to invest in new physical and social infrastructure.
The setting up of seven mega investment textile parks besides the PLI scheme for the textile sector will attract huge investments in the textile industry, which is facing competition from China, Vietnam, Bangladesh, Turkey, Indonesia, Taiwan, etc. Smaller countries like Bangladesh and Vietnam have moved ahead of us with large FDI flowing into the sector. Textile parks and units eligible for PLI will attract both overseas and domestic investment. The government is looking into the issue of inverted duty structure in the GST, which may also address some of the challenges faced by the textile sector.
The support to shipping will pave the way for developing large shipping lines in India to compete with foreign shipping lines. India annually remits over $65 billion in transport services, and with exports targeted to touch $1 trillion, the same will swell in the next few years. An Indian shipping line will not only help retain such remittances, but will also have a ready-made market. The privatisation of the management of major ports will bring the necessary efficiency to provide better services at competitive costs, since our major ports have huge capacity but are losing market share to private ports.
India is building on its agri exports through the Agriculture Export Policy and transport and marketing assistance. However, the lack of agri infrastructure is a serious handicap. The levy of agri infra cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel will provide necessary corpus for building world-class infrastructure to link farm to fork.
Metal and commodity prices are moving northward and reduction in customs duty on many inputs such as steel scrap, semi/flat of alloy and non-alloy steel, copper scrap, nylon fibre, nylon chips and caprolactam etc would help soften rising prices. But the Budget should have focused on R&D through tax deduction and exemption as India’s R&D spending is very low, even as R&D and innovation are necessary for sustained exports. We were looking for greater support to the Department of Commerce at a time when global trade has shown signs of recovery so that pending claims of exporters are released to ease liquidity and greater push is given to marketing and branding.
(Writer is the President of FIEO)