Budget 2017 has provided support for the MSME sector by reducing the tax rate by 5%. There are some initiatives towards improving the ease of doing business and streamlining compliance requirements. These will help the MSME sector become more competitive as well as encourage compliance. MSME Sector is the backbone of the economy in job creation and this should help create new jobs. From historical data, it is seen that most jobs are created in the first five years of setting up a business. After five years, the business growth tapers off. Hence we need to encourage new business formation. Here is where the budget could have done more – there isn't anything new in the budget for startups and new business creation. We should create an aggressive goal of creating 1 million new businesses, with at least 10% of these created from academic research.
In order to create long term growth, India needs to invest in research. As a percentage of GDP, our investments are 0.8% of GDP. I wanted to see increased allocation towards research, especially moonshot projects like Chandrayaan or Mangalayaan. The next 30 years are going to see exponential opportunities in healthcare, transportation and logistics, manufacturing etc. Examples are cure for cancer and genetic diseases, driverless cars, 3D printed objects, appliances and food etc. India must invest in research in these technologies, create products and businesses, create an innovative future for our economy and create jobs of the future. This budget was an opportunity to invest in creating such a future.
The final piece on investing for the future is about investing in education and skill building. Though the budget details were not given, the FM in his speech talked about setting up of National Testing Agency, reforming UGC and giving autonomy to colleges and institutions. We need to get more details on these to understand the implications of these. It is important to fund institutions of higher education, at least the top 50 of them, to global standards if we want to create world class educational institutions. In terms of skill building, the FM allocated ₹4,000 crore for the Sankalp program on skill-building and set a target of training 1 crore people.
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