Finance Minister Nirmala Sitharaman set the tone for Budget 2022-23 when she said: “This Budget seeks to lay the foundation and give a blueprint to steer the economy over the Amrit Kaal of the next 25 years– from India at 75 to India at 100.” After that, all that she said aimed at long-term, sustainable improvements and not short-term fixes, which could benefit India’s manufacturers, traders, and exporters.
Moreover, the continued focus on Atmanirbhar Bharat is good news for domestic manufacturers. The Finance Minister announced a slew of duty changes that will make imports less viable and boost procurement from local producers. However, increased demand is not the only answer. Any trade is only as good as the infrastructure available to get goods and services timely to the market. The government preempted all critics by stating that the PM Gati Shakti plan would drive growth.
Why is this initiative important? PM Gati Shakti is a national master plan for multimodal connectivity geared towards integrated planning and implementing infrastructure projects, improving connectivity. “PM Gati Shakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure. All seven engines will pull forward the economy in unison,” said the Finance Minister.
She also added that the PM Gati Shakti would focus on creating “world-class modern infrastructure and logistics synergy among different modes of movement– both of people and goods– and location of projects. This will help raise productivity and accelerate economic growth and development.”
A special focus on roads and railways could help local manufacturers, mainly if the idea of ‘one station, one product’ is popularised. And, in a boon for exporters, Nirmala Sitharaman announced that: “One hundred PM Gati Shakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.”
While logistics is a significant part of trade, it’s not the only component. There seems to be a clear understanding of that, as the Finance Minister announced that four portals used by MSMEs – Udyam, e-Shram, NCS, and ASEEM– would be linked. “They will now perform as portals with live, organic databases, providing G2C, B2C, and B2B services. These services will relate to credit facilitation, skilling, and recruitment with an aim to further formalise the economy and enhance entrepreneurial opportunities for all.”
Most importantly, there has been the assurance of financial assistance to the trading community. The Emergency Credit Line Guarantee Scheme (ECLGS), unveiled as part of the government’s covid-related aid to MSMEs in 2020, has helped 130 lakh MSMEs mitigate the worst impact of the pandemic. The government has declared that this scheme will be extended till March 2023 and bolstered by an additional Rs 50,000 crore (earmarked for hospitality and related industries).
To facilitate an additional Rs 2 lakh crore for MSMEs and help them expand employment opportunities, the government plans to revamp and re-fund the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE). Also announced was the plan to roll out a Raising and Accelerating MSME Performance (RAMP) scheme. With an outlay of Rs 6,000 crore over five years, the scheme aims to help MSMEs become more competitive and efficient.
Apart from this, the Budget mentions improving the country’s ease of doing business. In this regard, the Finance Minister mentioned digitising manual processes, improving fintech, and beefing up the digital payments infrastructure.
Coming to exports, the government has promised to incentivise exports of certain items. It also plans to replace the Special Economic Zones Act with new legislation “that will enable the states to become partners in ‘Development of Enterprise and Service Hubs.’”
Like most things, the Budget couldn't please everyone. Some sectors and segments have perhaps not been given due recognition. But as far as trade and exports are concerned, it looks like this Budget has taken most of the right steps.
The article was first published on economictimes.indiatimes.com
