In the September quarter of 2020, India’s economy contracted by 7.5% year-on-year, pushing the country into its worst-ever recession.
With the budget day coming close, there needs to a comprehensive plan on how to revive our economy, and bridge some of the gaps we’ve witnessed in the past year.
For example, the following points need to be taken into consideration:
● Budget for Startups:
Start-ups are considered as a backbone in the development of the Indian economy. And especially the Indian startup ecosystem has played a pivotal role in the country’s economic growth, with India now being the third-largest startup landscape in the world. However, it’s essential the government looks at “sustaining” this growth. MSMEs are looking forward to expecting an increase in the inflow of FDI to expand their presence, gaining access to the best manufacturing practices, and of course, stimulating the Make in India initiative.
We also look forward to seeing some benefits in the budget that MSMEs and start-ups can avail. Though we have had multiple announcements with respect to start-ups over the past few years, like the DPIIT Scheme of Start-up India, etc., in reality, there is only a handful of start-ups that were able to avail these tax benefits over the larger start-up population. Another point being, though the government deploys funds for startups, it doesn’t ensure that 100% of these funds deployed to the sector are used up, leaving the money stagnant in government reserves. Ensuring a comprehensive plan for the usage and allocation of these funds would be beneficial to the startup sector at large in India.
● Hemp Industry and Agriculture:
India is a developing country where the successful emergence of an entirely new industry will permeate much of our economy with greater force. At present, more than 60% of our population depends on agriculture, however, the sector accounts for only 15% of our GDP.
Hemp is the first cash crop with the potential to be a billion-dollar crop with a scope of farmers growing for industries, as this plant caters to nutritional products, medicine, house and building material, textiles, and 25000+ other products. To our advantage, Hemp is also native and indigenous to our country and grown naturally in over 60% of the Indian soil. However, the global Hemp market accounts for an increasing number of 42 billion dollars, with India’s contribution accounting for less than 0.5% to the global industry. This is a sector we anticipate exponential growth in, given there are enough budget allocations and policy reforms that work parallelly in support, as we have the potential, capacity, and intimate knowledge to become global leaders of this emerging industry. For a country that struggles with water crisis and farmer suicides due to its poor yields and climate change, Hemp could emerge as the solution to India’s agriculture.
● Budget allocation for agriculture warehousing infrastructure:
Speaking in terms of Agriculture, extending policy reforms towards efforts in increasing infrastructural support in agriculture is another focus area. Infrastructural gaps like lack of scientific storage solutions, such as warehousing and cold storage plague Indian agriculture. Prices of raw materials shoot up during non-harvest season as farmers lack proper warehousing to store the material and supply it over time, thus, directly impacting market prices.
Also, including credit for agri-infrastructure projects under the direct lending of Priority Sector Lending Norms would provide an attractive option for private players’ entry.
● Regulating tariffs on exports:
Considering that exports have emerged as a significant growth driver and have the potential to boost economic recovery, our country’s share in world exports needs to be raised. We expect some positive benefits and regulatory frameworks to work parallelly when it comes to exporting agriculture and consumer goods overseas, as this will enable us to get fresh liquidity into the country.
As we battled one of mankind’s biggest health crisis ever, major gaps in the healthcare sector came to light. India has been a country that lacks access to even basic medical health facilities. Thus, the budget must have a specific allocation to ensure accessible and quality healthcare to all the citizens of the country. The major challenge that needs to be addressed through infrastructure is the rural-urban divide in healthcare. To ensure accessibility and quality healthcare even in 75% of India’s population that resides in rural areas, the availability of e-health/e-medicine will play a transformational role. By making budget allocations for the development of telemedicine and home-based healthcare ecosystem in the country, it is possible to best harness the available resources to cover the whole country.
The government must also support to promote domestic innovations as innovative, tech-based, and affordable healthcare solutions are the need of the hour, and the market for healthcare start-ups and digital healthcare is robust. This will not only reduce our dependency on foreign imports but also boost the Indian startup cluster and make the healthcare market more economic.
Last year, the budget allocated only 1.29% of the GDP to healthcare. However, we look forward to a greater fund allocation this year, so the government can ramp up the medical and training infrastructure in a big way.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.