Cashless transactions, accident and life cover, freeing entrepreneurs from the never ending paper work – these are just some of the good things about this union budget and how it can help the country to progress.
Union budget of the government every year is an occasion that provides a definite guideline to the way the economy would traverse the path in the coming years, the thinking of the government of the day about the manner in which they want to govern it and the policies that would be the guiding tools in facilitating the same.
Viewed from this perspective the current budget, which already has become the talk of the town, could be instrumental in laying the foundation for a new and prosperous India. Moving beyond the jargon, here are 5 key aspects of the budget that I think will have the greatest positive influence on the country this year:
1. Creation of Mudra Bank
When one talks of Make in India and moving India forward, one has to pull along those who live at the fringes and are still denied the benefits of the institutional financial mechanism on one pretext or the other.
Therefore in the current budget it has been proposed to set up a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore and credit guarantee corpus of Rs. 3,000 crore.
MUDRA Bank will refinance Micro-Finance Institutions. Mudra Bank will also give priority to SC/ST enterprises and this step would help in the fostering and development of entrepreneurship for the marginalized in a big way. Besides, it would facilitate a leverage of 6:1 and it could have a good multiplier effect on the economy.
If the country has to develop and ‘Make in India’ has to gain ground, creating enabling conditions for the fostering of the creed of first generation entrepreneurs is imperatively required and MUDRA Bank would be able to cater to the needs. One of the most drab sections of the economy has acquired an aura of glamour through this initiative. This would help about 5.77 crore small business units at the bottom of pyramid gain access to institutional financial system and grow, signifying an important paradigm shift from job seekers to job creators.
2. Encouraging cashless transactions
India is one of the most currency dependent countries in the world, with about 18% of its financial transactions being done in cash, and efforts of Reserve Bank of India to reduce these numbers would be facilitated by policy pronouncements to encourage citizens to move to cashless transactions.
With the Jan Dhan Yojana whereby more than 11 crore bank accounts have been opened and the same number of Rupay cards being issued, digital transactions indeed would get a major boost.
Scores of studies have underlined the fact that moving to a cashless society helps in contribution towards the GDP positively by between 0.5-1 percent. It is the retail transaction that should gradually move to cashless scenario, as it is the major point of introduction of counterfeit money, and once POS (point of sales) terminals foot-map the retail landscape it would really be a positive step forward to curb incidence of black money as well. Cashless transaction is the way of the future and this indeed would be a positive step forward to achieve the same.
3. Ease of doing Business in India
One of the biggest laments in the country has been the maze of paper work that an entrepreneur has to endure to set shop. But this is set to change as the government has proposed the establishment of a single window authority that would help in setting up a new business or shutting down the same.
With this single initiative, the government would help scores of entrepreneurs to take that definite first step forward, which they were hesitant to take all along owing to the dread of the endless paper work.
4. Plug and Play model in infrastructure
Power is one of the most critical requirements if the country has to progress.
With that in mind, the budget has paved the way for setting up of Ultra Mega power plants of 4000 MW each in the plug and play model, i.e. once a bidder has won the contract, he can start the process of setting shop without bothering about 70 statutory clearances from the centre and state departments.
It would cut the turnaround time and also breed competitiveness, ultimately benefiting the consumer.
5. Accident and life cover
India has been one of the most notorious countries in the world, as far as deaths due to road accidents are concerned. To bring some hope to the hapless victims, it has been proposed to launch the Pradhan Mantri Surakhsha Bima Yojana which would provide coverage up to Rs. 2,00,000 by paying a premium of only Rs. 12 per year.
This scheme would also provide coverage of Rs.2 lakh in case of death for citizens between the age of 18-50 years for a premium of Rs. 330 per year under the Pradhan Mantri Jeevan Jyoti Bima Yojana.
Budget exercises have their own rationale as well, but these innovative measures should indeed go forward in facilitating a Better India in a much more exuberant manner.
– Nalin Rai