To many, India’s Finance Minister Nirmala Sitharaman’s Budget this year seemed to tick all the right boxes. It provides sufficient impetus to crucial sectors like healthcare and infrastructure, all the while sparing the common man from the harsh pinch of a new cess or tax.

While I do commend the government for their clear commitment to boosting growth, there were still a few areas that left stakeholders wanting for more.

Focus on healthcare and infra will instil confidence

An increase of 34.5% in capital expenditure from last year, taking it to a whopping ₹5.54 lakh crore, major push for roadways and railway freight corridors, the setting up of a Development Financial Institution with a proposal to capitalise it with ₹20,000 crore, allowing FPIs to debt finance InVITs and REITs and a National Asset Monetisation Pipeline—this is a robust mix of measures with a clear intent to provide a shot in the arm to the infrastructure sector with the aim to ultimately generate more jobs and kick-start growth.

It was no surprise that healthcare was in focus this year, given that we are still tackling a global pandemic. The total outlay for healthcare rose a staggering 137%, with a special push towards vaccination.

This was a crucial move necessary to instil confidence among citizens, corporates, and investors alike.

A clear signal of stability and confidence

From the much-awaited “bad bank” to allowing non-residents to set up one-person companies; from a singular code for securities market transactions to a voluntary vehicle scrappage policy—the common thread running through all the announcements made by the finance minister in her Budget speech this year was one of rationalisation and predictability. The increase in FDI limit in the insurance sector to 74% has also been welcomed. This Budget sent out a clear signal of stability and confidence to domestic and foreign players alike.

India committed to enhancing ease of doing business

The government has walked the line and announced more changes to enhance the ease of doing business such as mandatory advance bill of entry filing to decongest ports and a Common Customs Electronic Portal. Aatmanirbharta could also be seen in the government’s proposal that all conditional duty exemptions have a sunset clause. Corporate India and the investor community have taken these as signs that India is moving towards a more stable business environment.

Clarity on direct overseas listing would have helped

Many had their eye on the Budget speech to see if a road map for direct overseas listing would be announced. Clarification on this is still awaited but would have greatly benefitted Indian companies working in emerging sectors and allowed them to access stable long-term capital.

More gifts for services

The services sector will play a pivotal role in bringing growth back on track. The government should consider ways of providing impetus to this sector. After a challenging year, a bit of relief or incentive would have been a welcome move.

All in all, this year's Budget doubled down on the government's commitment to necessary reforms, even in challenging years, with a view to get the engine of growth running at full capacity once again. To future-proof India’s growth, predictability on tax and resolving the Vodafone tax issue will go a long way in aligning India’s Aatmanirbharta policy with boosting big-ticket foreign investments and attracting funding for its privatisation drive.

Views are personal. The author is a Partner at Khaitan & Co.

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