Budget 2020 boosts consumption and inclusive growth

Budget 2020 boosts consumption and support inclusive growth: DBS Bank

By Surojit Shome

The Union budget presents the government’s intent to boost consumption and support inclusive growth. The revision of the income tax rates and the option for individuals to opt for a simpler and lower tax regime is likely to incentivise consumer spending and stimulate demand.

The proposed allocation towards the BharatNet programme continues the digital transformation efforts by the government to provide deeper access to digital connectivity. This will enable a larger part of the rural population of India to come within the ambit of the formal economy and create an accessible framework for digital financial services.

In a fillip to the SME sector, the government is providing subordinate debt which could bridge a key gap in the ecosystem and increase access to working capital. The thrust on the GeM platform also presents a significant opportunity for SMEs.

The removal of the Dividend Distribution Tax (DDT), proposed exemptions for the sovereign wealth funds and the proposals on withholding tax will have a positive impact on foreign investments into India. This will help the infrastructure and real estate sector. Additionally, the substantially expanded disinvestment program is a positive step.

(Author is General Manager & Chief Executive Officer of DBS Bank India)

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