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The Union Budget was delivered amidst uncertainties over economic growth (nominal GDP) which was expected to fall below the double digit mark, revenue short-fall, rising global uncertainties and muted expectations from the public at large.
The overwhelming majority in the Election 2019 by NDA (especially BJP crossing the 300 mark on its own) may have raised the expectations from the public at large for a big bang Budget but fiscal compulsion and a reality check had turned the mindset of people that this would be the Budget that would be high on 5 year road map and low on near term delivery.
The FM, given the circumstance, has done a decent job, laying down the broad guidelines for achieving $5T economy by 2025. The Government also continued with its fiscal consolidation path by sticking to the fiscal deficit target of 3.3% for FY20 and the same would be partly financed by borrowing from international markets.
The Budget 2019 also focused on attracting overseas money hereby offsetting part of the problem of lack of capital in the domestic markets. Budget 2019 also focused on structural reforms and on behavioral aspects of the society. It has highlighted the achievements of the last 5 years in terms of uplifting the large section of the society, taking bold decisions in terms of bringing path breaking reforms and focusing on governance.
Budget 2019 is very high in terms of taking path breaking initiatives like indirectly reducing stake in state owned enterprises, opening up gates for foreign money to flow in, taxing the super-rich with higher rates, incentivizing fight against climate change, igniting skill India, facilitating ‘Make In India’.
To sum up, Budget 2019 is setting a path for a $5 trillion economy by outlining a host of measures in the area of Make In India, labour reforms, financial sector reforms, social imapct, enhancing ease of doing business and forcing acclimate change. However the focus now shifts to details and execution.
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