Like every Indian, who will be hooked to the television tomorrow for the BUDGET 2021, our MBA masterminds too had their share of discussion and expectations with regards to one objective of improving our GDP growth with respect to all the five major sectors of the Indian economy aligning that with the 17 SDGs. On 31st Jan 2021 the students of KSOM came up with a brilliant form of discussion w.r.t the provision, progress and expectations from Budget 2020, under the able guidance of Prof. Shikta Singh. There were five student panels representing – Agriculture & rural sector development, finance, healthcare, education and infrastructure. They were ably guided by Prof. Shikta Singh.
The session began with the welcome address by Prof. Shikta Singh, on the relevance of budget. She mentioned COVID-19 which has emerged as a black swan event has stifled the global economy. Governments across the globe as well as in India initiated fiscal and monetary stimulus programs to combat the damaging economic effects caused by the virus. Having understood the emergency of bringing the economy back on track, the theme of today’s discussion- CONNECTING THE DOTS- BUDGET 2021, is steering a way towards matching with the expectations coined out by our student panellists, who have very vividly delineated the flow of discussion.
The session took a way forward with setting the context by Prof. S.N Misra, Dean, KSOM, KIIT Deemed to be University. He very vividly brought into the issues on the trade-offs amongst fiscal deficit, inflation and GDP.
Taking it further Prof. Saroj Mahapatra, Director KSOM, KIIT DU addressed and congratulated the students for their active participation.
The five student panellists discussed the various facets of the sectors viz. Agri and rural development, finance, infra, health & education& industry.
The agriculture sector, has high expectations regarding farm’s bill, women labour participation rate and schemes that would allow them to take credit for banks easily that would help to achieve this target. For achieving the target pertaining to doubling of farmer’s income by 2022 ,it also needs better pre and post-harvest handling facilities, storage and distribution to boost the exports and providing online platform to promote their sales of product. Involvement of Krishi Vigyan Kendras to take export oriented technology to farmers. Attracting private investments by promoting value added organic exports and Ayurveda. Boosting of agri- credit through centralized database, monitoring of KCC in uniform manner and increasing the viability of small farmers, including animal based farmers. Moreover, addressing a major concern of irrigation, we expect this year’s budget to address the problem by installation of micro-irrigation system. More fund allocation to MNREGA to spur consumption.
Taking of the financial sector, corporate tax reduction has boosted investor sentiment in the midst of a severe slowdown. After this cut base corporate tax rate in India has become competitive and should help to boost investment. Corporate tax reduction has boosted investor sentiment in the midst of a severe slowdown. After this cut base corporate tax rate in India has become competitive and should help to boost investment. Addressing the major concern, Tax, the expectation is to increase in 80c limit, exemption limit to increase to five lakhs. The expectation w.r.t personal tax cuts will be a major push to the demand side, thereby increasing the disposable income which will have an impact on enhancing the purchasing power of the individuals reviving back the consumer’s confidence. Further, With few changes in the regulatory framework in life insurance industry will lead to the growth of the industry. Capital markets expect that DDT should go holding period in regard to LTCG should be increased from 12 months to 2-3 years. Pumping in credit facilities into the financial sector especially focusing on MSMEs. Moreover, expectations moved in to raise interest deduction for a housing loan to the tune of Rs. 2 lakhs. Abrogation of angel tax or GST rate cuts for EVs and 100% FDI investment into insurance intermediaries and focusing on insurance schemes.
Addressing the concern with start-ups, the industry sector expects lucrative incentives like tax incentives to be included. Excluding start-ups from section 42 of Companies Act, improvement with regards to gender equality and ease of doing business to boost the start-ups. The panellist expect installation of smart meters to improve operational efficiency of DISCOMS, reforms in UDAY scheme to reduce the aggregate technical and commercial losses to less than 10%. Increasing the investment of 1.77 lakh crore in the renewable energy to achieve the SDG goal of affordable and clean energy.
With FMCG sector is expecting one single GST rather than complicated GST slabs, the automotive sector has expectations of reducing GST from 28% to 18% to increase demand. A budgetary allocation of 12000cr in MSME sector is expected from this year’s budget. Setting up of Khadi institutes, to increase the demand in the MSME sector and also more focus on improving the exports that would encourage local productions.
The masterminds, also expect suitable reforms to be rolled out to expand manufacturing units in tier-2 and tier-3 cities, creation of investor friendly trade regime to spur momentum in the manufacturing sector and signal the transition from expenditure led economic growth to demand led economic growth, reforms on inverted duty structure .
While everyone is looking for a boost in infrastructure, we expect the government to focus on renewable energy sources, more liquidation and pump more cash flow into the market, and more encouraging schemes to boost infrastructural developments to attract FDIs. Disinvestment in the laid back PSUs or ways to increase efficiency and profitability is expected from this budget by sticking to an asset monetisation plan. The sector also expects an improvement in roadway acts that leads to the growth of automobile, and ancillary industry. Inclusion of more airports under the “UDAAN” scheme will further boost revenue into the aviation sector.
One of the major sector, Health care, expects more policies to safeguard our women’s health that would ensure more women participation in the labour force which will boost the economy. It also expects lower GST on health equipments, inclusion of action policies like tax holidays to boost the Make In India initiative. Bring on the home healthcare under limelight under the Ayushman Bharat Yojana was a major expectation in this year’s budget. Slashing down GST on critical healthcare equipment like ventilators, wheelchairs etc. to boost quality healthcare.
Hence, all such expectations are expected to be noted by our Honourable FM Nirmala Sitharaman.
The sessions were brilliantly handled by the student panellists.