The Indian Economy Is On A Growth Path: Bhagwat Karad
As the euphoria over a Union Budget that reached out to almost every sector of the economy began to settle in, BW Businessworld caught up with Union Minister of State for Finance, Bhagwat Karad, for an insight into the thinking that had influenced the exercise. In an exclusive interview with BW Businessworld Editor-in-Chief Annurag Batra, Karad said apart from strengthening the Atmanirbhar Bharat and Ayushman Bharat missions, the budgetary allocations had been driven by the government’s aim of “taking care of the people, and the development of the economy”.
Excerpts:
Union Budget 2022-23 has been received well and caters to almost all sections of society. Can you please give us a sense of the process that had gone into this exercise?
On 1 February Hon’ble Finance Minister Nirmala Sitharaman Ji presented the budget in the Lok Sabha. The budget used to previously be brought to the Lok Sabha in a leather bag, but that tradition was discarded by the Finance Minister, and she published the budget digitally, using an Indianmade tab. She took this bold step in 2019 and has been presenting the budget digitally since then. Before the presentation of the budget, usually, the entire team gets together and distributes sweets at the Halwa ceremony. This year, due to the Covid-19 pandemic, that system was ruled out, but the budget-making team had a discussion, and we went to the Hon’ble President and met him. The Finance Minister discussed the budget and took permission from him. We then went to the Cabinet meeting, and after that, presented the budget. This is the system of presenting the budget, by first completing all the formalities.
Who were the stakeholders you had in mind for this year’s budget, and what went behind the scenes on who it impacts and why. Also, the budget came 21 months after the onset of the pandemic, and just before some Assembly elections. Even so, it was shorn of populism. What was the thought process that inspired the budget?
This budget has primarily been developed to boost the economy of the country. This is especially important in the aftermath of the pandemic. The Indian economy is now on the path of growth, which can be seen from the increase in GST collections. So, the stakeholders kept in mind included MSME entrepreneurs, women, youth, corporates, and other business owners. One of the most important stakeholders was the MSME sector. The government has considered the concerns of all parties and this budget has catered to all sections of society
The Prime Minister has called this a budget for Aatmanirbhar India at party gatherings in election-bound states. What were the important decisions taken in it. Under the guidance of Prime Minister Modi Ji, Finance Minister madam has declared schemes to further the Aatmanirbhar Bharat initiative. Existing schemes have been further strengthened. The MSME sector has been allotted Rs 4.5 lakh crore and the last date for applying for the scheme has been extended to 31 March 2023 from 31 March 2022. Other sectors have also been given importance, with the government announcing the National Tele Mental Health Mission in this year’s budget to make 23 centres of excellence for mental health in India. At the same time the Ayushman Bharat Health Mission has been strengthened due to the ongoing pandemic, despite the third wave having been less severe. These two developments, along with the development of infrastructure, taking care of the people, and the development of the economy are the most important factors.
India is just coming out of the pandemic. India has been successful as far as the vaccination programme is concerned. The government has used this period as an opportunity to strengthen the health infrastructure. Do you see the budget doing that?
While discussing the health infrastructure, I want to congratulate Prime Minister Modi Ji since he has taken great steps to develop our health infrastructure. In India, there are two vaccines which were produced at first, and now there are three. Due to domestic production, we were able to complete mass vaccination. I am proud to say that India is one of the only countries with such a huge population to have been able to conduct vaccinations at the scale at which we have. We have administered more than 150 crore vaccines doses till now. It is because of such mass vaccination that we have been able to control the third wave of the pandemic. No doubt there are a lot of cases, but the infection intensity is low, and it is like a common cold for most. Still, the people in the country have been taken care of. The development of the health infrastructure has progressed significantly. Take ventilators, for example. In the second wave, the Government of India provided ventilators to all the districts. To purchase a ventilator, a doctor would have to spend Rs 10 lakh earlier. Now, ventilators are made in India, and they are available in the market for Rs 2.5 lakh.
Oxygen facilities were made available by the Government of India, who spent on building oxygen plants at district hospitals and medical colleges. I am from Aurangabad. In our district, the Government of India has provided two oxygen plants. Similarly, 612 districts were given oxygen plants, and this is attributed to the vision of the Prime Minister.
You prayed on the day of the budget, and you asked your fellow parliamentarians to pray for the prosperity of the country. Do you think all the issues you wanted to address were addressed in the budget?
I come from rural India, from a farmer’s family, and a poor family. I have not observed, but experienced poverty when I was a medical student and even before that. I learnt from government hospitals and hostels, where poor students were enrolled, about this tradition. It is also a culture in my family to pray to God, especially on auspicious days such as Budget Day. As MoS for Finance, I was part of the team for the budget, and I prayed to God to make India a wealthy country. When Finance Minister Sitharaman Ji was reading the budget, and when I heard and read the budget, I was happy with the issues that were addressed.
Building the healthcare infrastructure was an exigency and the Modi government has done well in creating it. The digital economy theme has also been an important part of the Modi government and somehow bringing crypto into the formal industry has been welcomed. What are your views on the policy clarity given to different issues, apart from spending on infrastructure?
In the budget presented, PM Gati Shakti is a crucial scheme to develop infrastructure in our country. In this, seven factors were considered such as roadways, airports, ports, mass transport, logistics, and railways. If we develop these, the people will also be benefitted as it will boost the economy significantly. Coming to digital, our PM’s vision is a Digital India. After I took oath as MoS, the Prime Minister told me that I should work hard for three things: literacy, digitalisation, and financial inclusion. Digitalisation is an important part of this budget. There is also a mention of digital banking which will be governed by the RBI. Further, the government may also introduce the Digital Rupee soon. Crypto, although it is called a currency, is not a currency in India. Crypto is considered an asset by Indians, who have put their money into it and have earned money from it.
The Government of India is introducing a 30 per cent tax on this income, and there is also a one per cent TDS imposed on each transaction. This is an important step for the Indian government in the shift towards its legalisation. It is important for transparency. Transactions become transparent and avoid corruption. If we have to make India corruptionfree, digitalisation is essential.
The digital currency, financial inclusion, and digitalisation can bring a lot of benefits for rural areas and the poor. Can you say a few words on this? People are now getting trained in doing digital transactions. If you see smaller businesses like street vendors, they are using UPI and digital payments. This makes it very easy for the future and we are going ahead with it. Even common people are benefiting from digital today.
We are in 2022. We have two-and-a-half years more of this government. The government is known for making structural changes. For example, the GST was a structural change, which had some teething issues at the start, which have paid off now. The budget has announced any such structural changes.
The Prime Minister’s vision is important here. Under his guidance, different schemes have been released in India. These schemes touch upon different segments of society, such as industrialists, women, and youth. It is also important to strengthen these existing schemes. What can be seen in this budget is the aim to achieve stability in different sectors and achieve growth in different sectors. For example, the Pradhan Mantri Awas Yojana was allocated Rs 48,000 crore which will provide housing for 80 lakh people. This budget has strengthened certain existing schemes. In this budget, Prime Minister Modi’s statement, ‘Sabka Saath, Sabka Vikas aur Sabka Prayas’ has been upheld. The budget has focused on taking everyone along for the development and growth of India’s economy.
There is still Covid-19 (to grapple with), and we are still not out of the pandemic. But if you see the economic growth – the collection of GST in January was Rs 140,000 crore, and before that, it was Rs 130,000 crore in December 2021. These were more than our estimation – and the economy is growing, and businesses are running. This budget will provide a booster dose, as it will provide permanent immunity to increase the strength of our economy and I’m sure under the guidance of the Prime Minister, India’s economy will grow. The budget will be helpful to all sections of society.
