The Union Budget is truly a transformative one as it seeks to pull out all levers within its ambit to mark yet another successful attempt by the government to rejuvenate a pandemic-ravaged economy, said the Confederation of Indian Industry (CII), Kerala.
The bold measures which touch almost all critical sectors of the economy are expected to galvanise all-round recovery, said Thomas John Muthoot, Chairman, CII Kerala, and Chairman and Managing Director, Muthoot FinCorp.
Infra Bonanza for Kerala
The Union Finance Minister has announced allocation of ₹65,000 crore for development of 1,100 km of the national highway network in the poll-bound state that includes the 600-km section of the Mumbai-Kanyakumari corridor. Separately, she set apart ₹1,957 crore for the second phase of the Kochi Metro that envisages extension of services along an 11.5-km stretch to the satellite township of Kakkanad.
This is significant and would herald a huge boost to infrastructure development in the state, notably in conjunction with the Kochi-Coimbatore industrial corridor. Announcement of developing the Kochi fishing harbour into a commercial hub will boost the export potential of the fisheries sector. The retention of 41 per cent of the divisible pool as per 15th Finance Commission recommendation would enable the state to potentially borrow an additional nearly ₹9,000 crore annually, on top of the current entitlement of ₹26,288.49 crore.
Boosting Ease of Doing Business
The announcement regarding the setting up of the Development Financial Institution (DFI) is in line with CII’s recommendations. So is the National Asset Monetisation Pipeline that would not only boost sentiments but also generate additional resources. While welcoming the proposal to consolidate provisions of the SEBI Act, Depositories Act, Securities Contracts Regulation Act, and Government Securities Act, Thomas John Muthoot said that this may further boost ease of doing business.
Multiplier Effect on Economy
Sreenath Vishnu, Vice-Chairman, CII Kerala, and Executive Director, Brahmins Foods, said that the 34.5 per cent rise budgeted in capital expenditure for 2021-22 is mainly targeted at major infrastructure expansion initiatives, which is laudable. This is likely to have a multiplier impact on different sectors of the economy and help develop confidence about growth prospects beyond the ongoing recovery phase.
Vishnu is of the opinion that the ₹1.10-lakh crore outlay for Railways, of which as much as ₹1.7-lakh crore is for capital expenditure, and the decision to monetise dedicated freight corridors are going to benefit the state of Kerala. “CII Kerala is happy to note that the Budget has ticked the right boxes of lives, livelihood and growth, which would propel the economy to an inclusive growth trajectory. It expects the reform process to continue beyond the Budget announcements,” he added.