about 8 months ago
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Needless to say, the Budget has delivered on all fronts. Right from transparency and credibility of the data to the genuine effort being made to push growth while planning to raise revenue from monetization of assets and divestments instead of raising taxes; the Budget has ticked all the right boxes. Now the onus is on delivery; if things remains on paper and do not move swiftly we are in serious trouble.

So, as we get swept away in this Budget euphoria, let’s keep our feet firmly on the ground, as we need action more than talks and plans. Let’s be realistic and see how things will move post yesterday:

1: Thumbs up to all the infra build but remember, the Govt works through tendering, bidding and then awarding the contract. This does not happen fast. Thus realistically speaking, if the Govt moves at its normal speed, actual implementation, which will translate into creation of jobs and thus the multipler effect will happen only after 12-15 months. But if the Govt works swiftly, taking into consideration the extraordinary circumstances, 8 to 10 months might be the quickest.

2: Everybody is saying that the Budget has unleashed the animal spirit but hope it does not remain confined to only Dalal Street. The private sector has been tight fisted and there has been no capex coming from them; hopefully the Budget will entice them to finally start spending – not just Adani and Ambani; after all growth cannot come from Govt expenditure alone.

3: It’s a great move to raise revenue from disinvestments and monetization of assets. But once again, unless it meets the set targets, the entire math which has been worked out meticulously in the Budget will go awry. In fact monetization of its assets itself can take care of more than half of the target and rest by IPO of LIC but it all depends on what and how they sell – lest we forget, Air India is yet to be sold off.

4: Setting up of the National Bank for Financing Infrastructure and Development, with a capital base of Rs,20,000 crore is a great idea. It has set the lending target of Rs 5 lakh crore in three years. And a Bill for the creation of this bank has been listed in the ongoing Parliament session. Getting this bank going is crucial for all the chalked out infra projects to take off as few commercial banks are willing to take the risk of lending to infra projects in current times.

5: The Budget might have given a big boost to the market sentiments but on the ground, the common man on the street is not impressed and nothing changes for him. The sense of pessimism which currently surrounds most Indians remains – they acknowledge that things could get better but do not foresee any change happening in their life for the next one year at least. Many feel that putting money in the hands of the people directly is the only thing that will boost demand. Changing this perception will again need some time; only once there is assurance that their jobs are secure and they will get salaries will people slowly start spending. Once the confidence of the common man returns, only then will the Indian economy see the unleashing of the animal spirit.

All in all, it’s a great Budget but time is of essence here – if things chalked out do not move quickly, moods and the economy will turn despondent.

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