JULY 08, 2019 News the Newsbehind 31
indianeconomicpanoramaAVIATION
The government will consider
further opening up foreign direct
investment in aviation. Apart from
announcing another plan to sell state-
owned Air India Ltd., the government
also announced a plan enter aircraft
fi nancing and leasing.
WATER
Th e plan to provide piped water
across Indian households by 2024 and
the focus on managing the nation’s
resources by consolidating the country’s
scattered water administration under
the Water Power ministry underlines the
seriousness of India’s rising shortages.
REAL ESTATE &
CONSTRUCTION
Promise to build 19.5 million rural
homes by 2022, in addition to the
continued focus on building roads will
directly benefi t the rural economy.
SKILL INDIA
In a move that will skill and re-skill
millions of Indian youth to cater to
new age technology and job roles, the
government will now focus on new
age skills like artifi cial intelligence and
internet of things to help them get jobs
overseas.
According to a Nasscom report,
about 40% of India’s total workforce has
to be reskilled over the next fi ve years to
cope with emerging trends such as AI,
IoT, machine learning and blockchain.
India’s total workforce stands at nearly
500 million and of this at least 200
million would need reskilling to match
industry requirements.
EDUCATION
The finance minister announced
that the government will bring in a
new National Education Policy with
the objective of transforming the higher
education system in the country.
Under the proposed new policy,
major changes have been envisaged
for both school and higher education.
Other prominent aims of the policy
include a better system for governance
and more intense focus on innovation
and research.
EXPORTERS
While the budget announced
varied initiatives to incentivise MSMEs
(Micro, Small & Medium Enterprises)
and startups, any direct reference to
exports seemed amiss. Although it is
expected that announcements such
as completion of rail-based projects,
infrastructure projects and a focus on
sectors such Khadi, Bamboo and Honey
will give an indirect push to exports,
exporters were looking for specific
initiatives.
Ajay Sahai, DG & CEO, FIEO
however, says that exports should not
be seen in isolation. “Infrastructural
incentives, logistic support, flow of
credit, skilling, easy labour laws -- all
will have a positive impact on exports.
Th e cluster-based model for Bamboo
and Khadi will also act as a good boost,”
he says.
Jewellers, Gold Importers: An
increase in import tax boosted domestic
prices to a record. Th at would make
jewellery even costlier for buyers in the
world’s second-biggest market ahead of
the festival and wedding season starting
from August. Import tax on gold has
been increased to 12.5% from 10%.
RIVERS & ENVIRONMENT
Th e minister spoke about plans to
use more of the country’s rivers to move
goods within India. Supporters say it
will unleash vibrancy in internal trade
and complement the roll out of the
goods and services tax that will create
a single market. Critics say this plan
will worsen environmental concerns,
destroying vital ecosystems.
TELECOM
Cellular Operators Association of
India (COAI) - which represents the
three private operators-Bharti Airtel,
Vodafone Idea and Reliance Jio - saidit was expecting some relief measures
for the debt laden sector but hopes for
inclusion in the post budget review.
Stating that the industry hoped for
relief from the high taxes and fee, Rajan
S Mathews, director general of COAI,
however, lauded the government that its
budget focused on evolving technologies
like Artifi cial Intelligence, Big Data, and
Robotics etc and acknowledged their
critical role in the Indian economy in
the coming years.
ANALYSES
AN INCREMENTAL BUDGET
AT BEST
Eminent economist and Consulting
Editor, ETNow, Swaminathan Aiyar
found nothing grand in the Budget and
writes that he was surprised to see that
the Finance Minister (FM) didn’t even
mention the fi scal defi cit target, which
the market was eagerly looking for.
The budget, he writes “was
unexciting and incremental, rather
than radical, providing no fi scal boost
to accelerate GDP growth to the 8%
target for Modi government 2.0. It
was protectionist and inward-looking,
seeking to reduce import dependence
rather than increasing exports. No
wonder the Nifty crashed 135.60
points.
Th e budget assumes 12% nominal
GDP growth, presumably 8% real
growth and 4% inflation. But the
Economic Survey had projected real
GDP growth of only 7%. “How has the
rate gone up by 1% in one day? If one
reduces nominal growth to 11%, many
budgetary ratios will go haywire.”
Aiyar expressed uneasiness over what
he called a very high disinvestment
target and was also dismayed by the
move only to raise the limit for 25 per
cent corp tax and not make it for all.
“When you can do it for 99.3 per cent
of businesses, why not 100 per cent?”
He also said the move to raise
income-tax surcharge in the highest tax