November 28, 2020

It’s the turn of India Inc to harness the spirit unleashed by the budget

By Ritesh Agarwal

If developments of the past year are anything to go by, the economy world over is bracing for impact. With a continuing glut in oil prices, the coronavirus epidemic and ongoing trade tensions, the outlook for several promising developed and developing economies has been muted. However, not all is lost, as the Union Budget for India, suggests. As we enter a new decade, nations must revisit the pace and scale of reforms.

Small, measured steps alone may not arrest slowing growth. The need of the hour is a combination of measured pace and big bang reforms in different sectors and, the political and socio-economic will to dream big. In this context, the budget this year, presents a progressive framework to tackle the slide to 5 % growth while retaining the optimism of becoming a $5 trillion economy by 2025. The outlays for new airports, trains as well as asset monetisation of ports will help improve connectivity, boost internal trade and spending.

The tourism and hospitality industry generates significant foreign exchange and is a large employer with 52.3 million jobs and entrepreneurial opportunities expected to be created by 2028.

Allocations for the development of archaeological sites and museums and promotion of tourism will boost demand. Investments in modernisation and creation of new tourist hotspots like the Statue of Unity and programmes incentivising travel like the Paryatan Parv and Dekho mera Desh pledge mean good news for business.

Buoyed by schemes like Start Up India and the resolution of capital gains and angel tax issues, the startup sector has evolved tremendously from its humble beginnings in 2010. The budget has addressed some aspects with the five-year tax holiday for Esops but has left room for more. The ecosystem can benefit from single window clearances as well as further impetus to ease of doing business.

Similarly bond market reforms, listing of LIC, removal of DDT and decriminalising civil disputes are a promising start to improving the investment climate. However, certain expectations around capital infusion in banks and roll back of LTCG remain unmet. With large scale tax reforms that directly impact individuals and corporations, the government is placing a strong bet on entrepreneurship and domestic demand.

India Inc now has the responsibility of harnessing these breaks for the greater good.

(The writer is Founder & Group CEO, OYO Hotels & Homes)

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