This year’s Union Budget was presented at a time when the economy is slowly but steadily recovering from a once in a century pandemic. On this background the budget rightly focused on boosting growth considering the previous two tough years.

The finance minister noted the virtuous cycle of investment requires public investment to crowd-in private investment and that private investments require that support to rise to their potential. As a result, a strategy of driving capital expenditure to drive growth was adopted. The outlay for capital expenditure was sharply increased by 35.4% to `7.50 lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20, which is 2.9% of the GDP.

The introduction of PM Gati Shakti was another measure in stepping up the growth momentum. The finance minister said that the approach is driven by seven engines, namely, roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure.

With the Indian economy expected to witness real GDP expansion of 9.2% in 2021-22 and growth for the next financial year projected between 8% and 8.5%, the announcements augur well to support growth.

There are several other steps taken to boost infrastructure development in the country. Creation of a unified logistics platform and developments of 100 new cargo terminals in the next three years are one of those important steps.

Apart from steps for boosting the economy, the finance minister has also announced a host of measures to further financial inclusion drive. Announcements for the launch of 75 digital banking units and bringing Indian Post under the banking stack will bring a big push to digitisation in the banking sector. The Central Bank digital currency (CBDC) which will be launched in the next financial year using blockchain technology will also give a big push to digital money. The move will trigger preparations by the players in the digital ecosystem.

The government has recently revamped schemes of the Ministry of Women & Child Development in a bid to provide integrated benefits to women and children. Two lakh anganwadis will be upgraded under the Scheme.

In line with the government’s vision of housing for all, on 2022-23, 80 lakh households will be identified for the affordable household scheme. Rs 48,000 crore have been allocated for the same.

Another notable announcement was the extension of the Emergency Credit Line Guarantee Scheme which provided valuable support to the micro, medium and small enterprises during the pandemic. This scheme has provided additional credit to more than 130 lakh MSMEs. The scheme has now been extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.

The finance minister announced that the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds. This will facilitate additional credit of Rs 2 lakh crore for Micro and Small Enterprises and expand employment opportunities.

Financial inclusion also has received a boost with the plan to bring 100% of 150,000 post offices into the core banking system, which will be hugely beneficial for the rural population.

The higher than anticipated fiscal deficit along with a large borrowing programme has soured the mood of the bond market as yields rose after the budget announcements. Given the uneven and nascent recovery of economic growth, aggressive fiscal consolidation may not be the immediate need of the hour.

This Budget accelerates our country’s move to be a substantially inclusive society.

The author is MD & CEO, Suryoday Small Finance Bank