Foreboding a day before the budget

FRANKLY, the three most important news items came a day before the budget. In the Economic Survey 2022-23 a series of charts conveyed strongly the progress we are making as a nation in critical areas like electricity, roads, drinking water benefitting millions irrespective of gender, religion, caste or community which is so heartening. Secondly, the GST collections for January 2022 has been a record Rs 1.4 lakh crore, suggesting that the economy is beginning to chug along now.

There was some talk that the budget would do something for middle class taxpayers but I am not surprised this area has remained untouched. Typically, this would get attention only in election year and that’s still two budgets away. What I like about this budget is that there’s not much to talk about. Most developed countries don’t spend much time annually on budget announcements and we should also get there. For a normal citizen, a budget should be a non-event. The big announcement is the massive 35% jump in capex. It’s a great way to build capacity and generate employment. Execution at scale will be the key but so far this government has certainly demonstrated encouraging ability to build infrastructure.

The RBI planning to issue our own digital currency is an interesting change from a while back when the government suggested that crypto will be illegal. I suspect the government has been encouraged by the huge adoption of UPI and hope they can pull off a similar success. Rainmakers at VC funds investing in startups will love the capping of surcharge on LTCG to 15% on sale of unlisted shares but they should note that umbrellas are getting costlier. The third most important news of the day before was the daily COVID cases dropping from 2.3 lakhs to 1.6 lakhs. Rapidly dropping COVID cases, fast growing GST collections and a massive infrastructure investment does point to an economy that can grow above 8% in 2022-23. Fingers crossed.