Every Indian should sacrifice for $5 trillion economy goal: Amitabh Kant

I am happy with the Union Budget as it is progressive and forward-looking and addresses the problem of ongoing liquidity issue of the country, says Amitabh Kant, chief executive officer, Niti Aayog. During an interview with Swati Khandelwal, Kant said every Indian should sacrifice a bit to take the country ahead and be a $5 trillion economy. Excerpts:

On banking and liquidity crisis

I am happy with the Budget as I think it is a progressive and a forward-looking Budget because it is addressing the problem of ongoing liquidity issue of the country. The question of liquidity crunch has been addressed by recapitalising the banks with Rs 70,000 crore. It also addresses the second issue related to NBFCs and HFCs while the government will be acting as a stop back if there is a 10% loss, and the government banks have acquired the pool of assets. There was a need for a regulatory regime, and now it will be regulated by Reserve Bank of India. I also think they have been successful in bringing the needed discipline.

On taxation

A cess of Re 1 is slapped on petrol. But if we want to build the infrastructure of the country and reach the ambitious aim of being a $5 trillion economy by 2025 by keeping the growth rate at 9-10% then we will have to sacrifice a bit. Sacrifice by people like you and me will take the country ahead and bring its multiplier effect. So, every Indian should sacrifice their part to see the rapid growth of their country. So, the tax proposals are suitable.

On disinvestments

I think strategic disinvestments are vital if we view the bigger picture of instantly leaping to better growth as greenfield investments require time to yield results. Thus, there was a need for strategic disinvestment, public sector disinvestment and asset monetisation because the government owns enough assets such as mobile towers, grids and pipelines.

On investment

Introduction of brownfield projects will encourage the private sector to participate. For instance, queries are made if a road or airport projects are announced. At the same time, the banks are ready to lend them. Thus, this is a trigger and the Budget has a focus on it. If roads, airports and ports are developed and electricity and gas are provided to every home as well as homes are built for every individual/family, then it will give a big boost to the infrastructure sector, which will have a multiplier impact. The move will boost the animal spirits of the private sector. This could kickstart the economy and its growth.

On start-ups

The start-up ecosystem has received an incredible push. The angels investing in AIF 2 (Alternative Investment Funds) will not be taxed. This will lead them to invest in start-ups. Many things have been simplified for these start-ups. The digital payments process has also been encouraged. The merchants using the digital payments' system will not have to pay anything extra and the government will bear the respective costs. Individuals withdrawing over Rs 1 crore will be taxed at a rate of 2%. As a result, this will ensure the digitalisation of the entire Indian economy.

On renewable push

The other progressive decision is bringing big things in manufacturing such as giga factories (it was a proposal from Niti Aayog), PVs and solar. If mobile manufacturing and PV manufacturing for solar come to India, based on the same will be exempted under 35AD, which is a big thing. Apart from this, we have also said that we will go ahead on big manufacturing because earlier we were focusing on sunset sectors, which was very difficult, but now we will be focusing on sunrise sectors.

The focus on electric vehicles has been increased and Rs 10,000 crore has been allocated under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) II scheme. Apart from this, a tax benefit of Rs 1.5 lakh has been given on interest for the loan that was taken to buy an electric vehicle. This will result in bringing the electric vehicles at par with combustion vehicles. Owing to these factors, people will be encouraged to purchase these electric vehicles. An amount of Rs 10,000 crore from FAME 2 will assist to manufacture buses, charging stations, two- and three-wheelers. This can later lead to a decrease in pollution levels of cities and citizens will breathe clean air once again. The oil import bill will also reduce. 

Zee Media Newsroom