KIIT School of Management (KSOM) organized a panel discussion on post budget analysis of the Union Budget 2022 on 2nd February 2022. The discussion was held on a virtual platform in view of the pandemic. Mr. A. K. Sabat, Chartered Accountant; Dr. Ranjit Kumar Pattnaik, Ex- CGM & Advisor RBI and Ms. Kanika Pasricha, Economist, Standard Chartered Bank were the external experts participated in the panel discussion.
Dr. Saroj Kumar Mahapatra, Professor & Director KSOM, welcomed the eminent guests on behalf of the Founder, Prof Achyuta Samanta. He introduced different activities conducted in the school in pursuit of academic excellence. He described that though the budget seemed humble per se, but it was a vision statement for the future. Prof Mahapatra laid emphasis on capital outlay made for infrastructure projects, Gati Shakti, which would boost the economy on the whole. He also stressed on the agricultural boost that may be achieved by means of drone and technology. He concluded his address by hoping that the implementation of 5G will revolutionize the entire gamut of Indian economy and would help bridge the gap between the advanced economies and India.
Prof. Praveen Mohanty, Professor of Finance, KIIT School of Management set the context of the discussion by highlighting the importance of resource allocation in the budget while lauding the increase in the tax collection. He appreciated the initiatives of the government to focus on the growth by increasing the public spending on infrastructure development.
Dr. Ranjit Kumar Pattnaik, Ex- CGM & Advisor RBI, walked the participants through the nitty-gritty of the budget. He stressed on the borrowings made by the central and state governments in the context of the GDP of the country. He highlighted the borrowing and economic capacity of both centre and the state governments. He opined that the high debt levels would discourage investments in the private sector as issuing bonds to fund capex or borrowings will become expensive. He mentioned that the inflation and price stability is still a concern and also opined that all capital investments may not result growth since the return on capital should exceed the hurdle rate, aka the borrowing cost, to propel the economic growth.
Participating in the discussion, Mr. A. K. Sabat, Chartered Accountant described the budget as disheartening for the middle-class people of India along with the MSME sector. He believed that corporate and manufacturing companies have very competitive tax rates, and this should help India bloom into an export hub. He emphasized on the inflation index, which has gone up significantly since 2014 and has affected every citizen. He also mentioned that implementation of all capital expenditures proposed in the budget statement is vital which will improve direct and indirect job creation. He welcomed the tax levied on profits earned on crypto currencies and gifting of digital currencies.
Ms. Kanika Pasricha, Economist, Standard Chartered Bank, highlighted that the budget is growth oriented and right frame for the future economic growth. She mentioned that the challenges remain with the policy implementation. She emphasized that the increase in government borrowing is a clear sign that government is not fearful of rating agencies but to focusing on the capital expenditure to accelerate the economic growth. She opined that the capex will be helpful in rebounding the economic growth, at the time when the private investment is struggling. She emphasized on the expansion of tax revenue which is far below in compared to the developed countries. She opined that the rationalization of tax schemes is a welcoming move, which may further increase the tax collection.
Dr. S. N. Misra, Dean, KSOM explained that the capex will provide better employability with a multiplier effect. Allocation on public health and ‘Tap to every house’ is a welcome move. He also highlighted the government’s focus on early childhood education through anganwadi. He mentioned that the allocation of fund for early childhood education does not align with the expectation of the scheme. He also mentioned that “Poshan scheme” is a great initiative for the underprivileged children. He suggested that it would have been better to provide some incentives and relief to agriculture sector to induce the rural demand.
Dr. K. K. Ray, Professor, KSOM moderated the session. He opined that the budget is not a political budget but focuses on future growth. He believed that the implementation is the key where people in the Bottom of Pyramid (BoP) should be benefited. He mentioned about “K” shaped recovery in the economy, where sale of SUVs vis-à-vis motor vehicles is more than the pre-pandemic period. He emphasized that the immense focus on capital expenditure is welcomed by the industry & investor community that triggered boom in the stock market post budget.
A question-answer session followed the panel discussion. Dr. Praveen Mohanty, Professor, KSOM proposed the vote of thanks. KIIT School of Management has a regular practice conducting such discussions to keep its students abreast of the matter of national interest and fulfill its responsibility as an institutional citizen of the country.