Renewable energy

LinkRenewable energy will get a big boost from the Budget which can be termed the first-ever ‘Green Budget’... in our national interest we have to transform the country with clean energy. This Budget will help in that ‘THE WORLD economy is in deep trouble for over a year as never before. And in spite of India’s caution, globalisation has impacted the Indian economy deeply, with growth down from nine per cent plus to six per cent
This has led to three stimulus packages by the government
Monday’s Budget takes that process forward in a big way
Without calling it a stimulus package, this Budget will further stimulate the economy. For example, there were at least nine measures on infrastructure
Infrastructure development and infrastructure investment are the most significant drivers of development and growth as well as employment generation. With additional funding of India Infrastructure Finance Company Ltd, National Highways Authority of India, Railways, Jawaharlal Nehru National Urban Renewal Mission and power development, the way is clear for a huge drive to build new infrastructure. The key now is to ensure rapid implementation and world-class quality
In addition, there is a significant clean-up of the direct tax structure. Plus no reversal of indirect tax cuts ensures stability and continuity. Clearly, the finance minister, Mr Pranab Mukherjee, recognised the need to prompt and support investment, savings as well as spending. The tax structure is a strong determinant not only of business and public sentiment but it also influences tax ‘ compliance, tax evasion, tax revenues and the level of harassment. Simplicity in tax systems is the most important need and this has been done
In addition to direct taxes, the Budget has largely left indirect taxes to continue, maintaining overall stability. Also, certain irritants which had led to long term differences and disputes have been addressed, especially for foreign investors
A worry clearly has to be the high level of fiscal deficit but the way to address this is to ensure higher growth and higher tax revenue proceeds from disinvestment, and government has sustained its effort to revive the economy in the short term and deal with the fiscal deficit in the medium term
The growth process will be reinforced by this Budget and 2009-2010 should witness 7-7.5 per cent gross domestic product (GDP) growth, if not higher. It will flow from the numerous measures taken in the Budget
There is a global forecast that India’s growth rate in 2010 will be the highest in the world. This may actually happen in 2009
The second dimension of the Budget is “green”, ie, environment-friendly and clean energy focused. In a time of climate change and environmental crisis, the Budget needs to set policies which enable clean energy development to take place with speed. Through a variety of measures, the Budget does just that. Renewable energy will get a big boost from the provisions in the Budget which can be termed the first-ever “Green Budget”. Whatever may be the position of India in global negotiations, in our national interest we have to transform the country with clean energy. This Budget will help in that
The third dimension is that the Budget is focused on the “ground”. On rural development, the National Rural Employment Guarantee Act, Bharat Nirman, agriculture, rural infrastructure, vocational education etc, all of which translate into benefits for people below the poverty line. With 600 million people in rural areas, this ground-level focus is key to reinforcing rural development and, through that, enabling expansion of the market, the economy and higher growth
A very significant statement by Mr Mukherjee, made more than once, related to the role of private investment and the private sector. He made it clear that this is central to development and growth — a major departure from nearly 50 years of Independent India’s history. In terms of a statement it was very special. In terms of the responsibility it places on the private sector, it is huge. This may give priority to private sector but it also places expectations on its performance, its contribution to national development and public service
The signal coming from the new government is that there is a new focus on governance and implementation, much more than ever before. And that it goes beyond just intentions to find new ways to implement important programmes and projects. For example, the Unique Identification Card project, to be headed by Mr Nandan Nilekani with Cabinet rank, is a bypass of the normal procedures and systems
Clearly, more such quality implementation lies ahead
So Budget 2009, prepared under the leadership of Mr Mukherjee in just five weeks, is a steady, stable, growth-focused policy statement and commitment
It is comprehensive and forward-looking. It will reinforce growth and help deal with the very major challenges India has to tackle
s TARUN DAS is chief mentor, Confederation of Indian Industry