Budget Should Focus On Growth And Unleash Optimism
The Indian economy has been resilient and has recovered well despite the challenges posed by COVID-19. However, it is still fraught with risks and uncertainties caused by the ongoing third wave of the pandemic. The expectations from the Union Budget should be on spending to spur demand and encourage private investments.
The corporate world is anticipating that government announces fiscal, non-fiscal and regulatory measures in the Union Budget to alleviate the stress build-up due to ongoing pandemic disruptions as well as structural reforms to accelerate the pace of development.
The budget needs to continue the momentum of recovery during 2022-23 and seed double-digit growth during 2023-24. In this context, it is expected that the annual budget exercise will define a roadmap for the economic recovery and build a resilient India that upholds the promise of playing a dominant role in global trade.
Garments and fabric
The garment and fabric export industry suffered heavily last year due to an over 100 per cent increase in cotton fibre prices. This crisis was further accentuated due to the levied 10 per cent custom duty on the import of cotton fibre. In order to ease supply, this duty should be revoked. Also, since cotton yarn prices have increased by about 78 per cent, this year has had an impact on the sector significantly. If the import of cotton yarn is made duty free it would help in increasing supply domestically.
Last year government re-introduced the Rebate of State and Central Taxes and Levies (RoSCTL) for garment exports and Remission of Duty and Taxes on Export Products (RoTEP) for yarn and fabric industry. These schemes helped the industry to get rebate of embedded Central and state taxes. Additionally, to encourage value-added exports wherein the fabric export is converted to garment export, the RoDTEP scheme should also be extended for deemed exports. In order to boost exports, the RoSCTL scheme should be extended also to advance license so that the garment manufacturers are encouraged to buy fabric for their exports indigenously.
Real Estate
2021 turned out to be a much better year for real estate compared to 2020. Most developers reported a significant increase in sales and leasing activity in 2021 as there was a demand for bigger homes and also lucrative incentives announced by the state government for homebuyers. Developers are optimistic that the trend will continue in 2022, especially with lower interest rates and stable prices.
Education
The education sector has seen a massive change with the outbreak of the COVID-19 pandemic. With the increased pace of tech adoption, there has been significant growth in online courses, the launch of edtech startups, learning software and video conferencing technologies. With the focus on learning beyond physical classrooms, it is crucial for bringing more children from rural areas to school by enabling access to tech gadgets coupled with data connectivity. There is a dire need to ensure higher allocation towards the education sector and support the edtech startups that are expediting the cause by creating educational and skill development courses for even first-generation learners across the country.
Automobile
The automobile sector needs a robust strategy for a quick recovery to improve the vehicle demand and ease mobility. The 28 per cent GST on two-wheelers should urge the government to reduce it to 18 per cent as two-wheelers are not considered as a luxury but a necessity to travel distances in rural areas for their daily working needs. A reduction in the GST on vehicles will help accentuate further demand, giving a fillip to employability in auto and allied sectors.
Focus on introducing structural reforms for nation-building will not just make us atmanirbhar but will also be crucial to emerging as a factory to the world.
