Know Your Budget
It was a big moment for the triumphant party’s government as well as the citizens of the country, as the world waited with baited breath to see what the powerful Modi government had in store for the economic growth starved country. A leather briefcase clasped amorously to his chest, Finance Minister Arun Jaitley was ever ready to present the Union Budget.
In the words of global management consultancy Hay Group India’s Managing Director Nitin Razdan, “Jobs and hiring in India needs to shift from being ‘qualification based’ to being ‘skill based’ as this will ensure that even the educational institutions will focus on imparting skills that lead to employability, rather than doling out certificates and degrees.” The government having clearly emphasized on job creation through the Budget as well as the much publicized “Make in India” program to make India a manufacturing hub, experts are of the opinion that millions of jobs are expected to be created in the coming years. Addressing the lack of skills development in the country, Finance Minister Arun Jaitley declared the launch of the National Skills Mission, a much required impetus to consolidate skill initiatives spread across several ministries.
Amidst all the growth and infrastructure incentives, the education sector saw a slight dip in budget allocation, even though the higher education budget was increased nearly by 13;%, indicating a shift in focus towards higher education. It’s evident that the government is aiming at improving the country’s GER (Gross Enrollment Ratio) from the current 18;% to 20;% in 2020;, overlooking a more real crisis in the shortage of faculty. The FM also announced a Rs.150; crore initial fund for research and innovation under the Atal Innovation Mission (AIM). AIM will draw upon national and international experiences to foster a culture of innovation, research and development and scientific research in India. With the goal to set up world-class innovation hubs, it will run hand in hand with the new AIIMS and IITs.
The Budget surprisingly did not get into the “Digital India” initiative, much to the amazement of the pundits. With the goal to deploy e-governance and e-services, there were expectations on substantial budgetary allocations to further the digital education agenda. Companies supporting online learning courses have not been able to reap the benefits of reduced royalty tax, while educational institutes have been eligible for heavy discounting from corporates. Visa on arrival from 150; countries to help attract students for research, and the FM going on to make a bold statement that no student should have to miss higher education due to financial issues, also proved to be the highlight of the education budget.
Institutes like MIT have nurtured entrepreneurial skills in students through ventures like MUTBI, where leadership skills and business acumen are honed. Such budding entrepreneurs expecting a bonanza were left underwhelmed, as the only marquee announcement was a Rs. 1,000;-crore ‘Self-Employment and Talent Utilisation’ program to help incubate startups administered by the Niti Aayog. With problems like difficulties in listing companies in India and abroad and double taxation on angel investments, the Modi government was expected to break the shackles. Thanks to the inflow of investments and foreign capital, we are witnessing an unprecedented surge in startups. However, entrepreneurs have still got the going tough with archaic regulations being a hindrance. Though certain hurdles like taxing the venture capitalist twice have been removed, a certain section of new businesses are still upset.
This year’s budget has been high on infrastructure and road development. Though some economists have been critical of the lack of painful and big bang reforms, often calling it a missed opportunity by the government, the Finance Minister in his first term has rather preferred a growth born out of slow paced fiscal deficits and foreign capital. A roof over everyone’s head by 2022;, impetus for road infrastructure and ensuring employment opportunities by turning India into a manufacturing hub have been high on Jaitley’s budget. The Space department too has enjoyed the spoils, the government having substantially allocated Rs.6000; crore for the same.
Prime Minister Narendra Modi is right in calling the budget pragmatic and prudent. At the same time, however, it’s also low on clarity. Seemingly, the Ministry of Finance has tried its best to present an impactful Budget, whose success lies in the involvement of the private sector in its implementation.