Sitharaman's maiden Budget provides building blocks for $5-trn economy

Union Budget 2019-20 has provided the building blocks for India’s march towards being a $5-trillion economy. While the Budget focuses on the core issues of health, education, power, and physical connectivity, it also outlines the vision for a New India that is eager to make a mark in new sunrise sectors like electric vehicles, semi-conductor fabrication, solar photo voltaic cells, lithium storage batteries and space programmes.
 
But beyond this fine balancing act between basic issues and aspirations to emerge as a powerful nation on the global stage, the Budget has made a concerted effort to address perhaps the biggest challenge facing not just India but the world – that of depleting water resources. One of the key thrust areas for Narendra Modi’s first government was connecting over 18,000 un-electrified villages and the same was achieved ahead of target. It is now evident that the key task during Modi government’s second term is to provide clean water to all along with rejuvenation and sustenance of water bodies.

 
Given the unpredictable and erratic rainfall, shrinking glaciers, falling water table, polluted rivers, and disappearing lakes and ponds, it is critical that water conservation is undertaken on a war footing. The government also realises that its vision for a progressive and developed India will be difficult to meet if something as basic and fundamental as water becomes scarce. Water scarcity is already a frightening truth in several parts of the world and it has the potential to derail even the best performing economies.
 

It is here that Prime Minister Narendra Modi must be lauded for his government’s focus and thrust on water management. The Budget today clearly stated that ensuring India’s water security and providing access to safe and adequate drinking water to all Indians is a priority for this government. The new integrated ministry, Jal Shakti Mantralaya will work for better management of country’s precious water resources, clean rivers and most important, provide Har Ghar Jal (piped water supply) to all rural households by 2024 under the Jal Jeevan Mission. Under Jal Jeevan Mission, the government will also create necessary infrastructure for rainwater harvesting, groundwater recharge and management of household wastewater for reuse in agriculture.

 
Another thrust area in the Budget is the push to all forms of physical connectivity through roads, industrial corridors, dedicated freight corridors, water ways and regional air connectivity. The Budget promises a blueprint for developing gas grids that will facilitate smooth transportation of gas to various parts of the country and revive projects that have been stalled due to paucity of gas. The Budget has also announced the government’s plan to invest Rs 100 trillion in infrastructure over the next five years that promises the change the face of the Indian economy give a major fillip to overall growth.

 
Further, the Budget has stated unequivocally that strategic disinvestment of select PSUs would continue to remain a priority of this government and it will offer more PSUs for strategic participation by the private sector. I am of the firm view that divestment of PSUs will unlock significant value and post-divestment, these companies can turn-around and emerge as growth engines of the economy. The Budget proposed to increase custom duty on gold and other precious metals from 10 per cent to 12.5 per cent. While the hike in customs duty is likely to moderate demand for gold in the economy, it is about time India started mining in gold and other precious metals to cut down imports and rein in its current account deficit. 

 
While the Budget also talks about the need to curb non-essential imports and cut India’s import dependence, we are hopeful that steps will be taken to safeguard domestic industries like aluminium, copper, iron ore and coal by raising import duties or correcting inverted duty structure.
 
Overall, the first Budget of Modi government’s second term is pragmatic, fiscally prudent and provides building blocks for building $5 trillion economy in the next five years.

 The writer is executive chairman of Vedanta