BGA’s India team, led by Managing Director Ratan Shrivastava, wrote a piece on India’s new budget. The update addressed the context behind the development and implications for clients.

Context

  • Finance Minister Nirmala Sitharaman on February 1 presented the fourth Union Budget of the Narendra Modi government for 2022-2023. The focus of the budget, in continuation of last year’s budget, is on capital expenditure which witnessed a 35 percent increase.
  • The budget for 2022 announced a slew of measures to increase digitization of the economy and boost growth, including introducing the Central Bank Digital Currency (CBDC), digitizing land records, forming of a digital university and providing a unique health identity to all residents. The announcements emphasize the government’s ongoing efforts toward digital governance and an inclusive Digital India. The budget also lays down a development path for the economy for the next 25 years, called India’s “Amrit Kaal.”

Significance

  • The impressive increase showcased the government’s continued emphasis on growth by utilizing capital expenditure, building a stable tax regime and encouraging technology-enabled development.
  • With a strong focus on government spending to boost growth, the budget’s expansionary fiscal policy aligned with the Economic Survey’s growth forecast of 9.2 percent in the current fiscal year and 8-8.5 percent for the upcoming year. India will remain the fastest-growing major economy in the world between 2021-2024, according to estimates by the International Monetary Fund and the World Bank.

Implications

  • The Indian government’s plans suggest new opportunities for business. The finance bill, based on the four broad pillars of inclusive development, productivity enhancement, energy transition and climate action, aims at financing investment and promoting new focus areas. In addition to the adoption of next-generation technologies and the rollout of a 5G network across the country, the bill also announces new initiatives on green energy, usage of drones and skill-building across sectors.
  • The budget has been hailed by industry leaders as futuristic, growth-oriented and well-rounded due to its non-populist and business-like approach.

BGA will continue to keep you updated on developments in India as they occur. If you have any questions or comments, please contact BGA India Managing Director Ratan Shrivastava at ratan@bowergroupasia.com.

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Managing Director

Ratan is a senior executive and management consulting professional who has a proven track record in government, consulting and industry across India and Southeast Asia, with a wide network across stakeholders. He has been instrumental in developing and implementing growth strategies for both the public and private sector and has led diverse teams to secure new market opportunities. Prior to joining BGA, Ratan was at KPMG India where he helped the integration of the small and medium industry clusters, with the domestic and global aerospace, defense and space supply chains. He also served as an advisor at the Federation of ... Read More