Balancing of long- and short-term priorities

The Budget has left us impressed with some of its profound statements. One must applaud the finance minister for containing and maintaining the fiscal deficit at 3.4 per cent of GDP for FY20. This essentially calms concerns about potential slippage on the fiscal front in an election year. However, what impressed me more is how he finely balanced the long- and short-term priorities. The highlight on the spending side is the income support scheme announced for marginal farmers, which marks an important step towards income-based support to the farmers. In addition, tax sops for the middle-class are clearly welcome. At the same time, the long-term vision for India was well articulated in the speech with the aim of a $5-trillion economy and focus on physical infrastructure, digital opportunities and environment. In effect, there was something for all. While one may argue there is an overemphasis on consumption despite constraints on the revenue front, the broadening tax base and collection, higher GST collection, proposed disinvestment plans among others must have given enough confidence to the FM. Two sectors, auto and real estate, are going to get a shot in the arm from the announcements. While auto would consolidate its growth further, real estate would see a turnaround, helping recovery across many other sectors. When the next government introduces the Full Budget, some of the benefits from this Budget would have already trickled down. For example, growth in rural income would lead to a growth in consumption. Now, it’s time for other key players like the RBI to chip in.