JOIN USFinance Minister Arun Jaitley has offered a fine blueprint of several small steps to further accelerate India’s economic growth, while sticking to the government’s commitment of waging a war against black money.
The highlight of this year’s Budget is its pro-poor thrust and a clear focus on key sectors like infrastructure, rural and agriculture, which can reinvigorate the economy through inclusive growth.
Also, the finance minister’s resolve to keep fiscal deficit at 3.2% of GDP for 2017-18 while at the same time stepping up capital expenditure by a fourth is indeed commendable.
Post demonetisation, the rural sector had come under stress, along with small and medium enterprises and informal sectors of the economy.
Credit commitments of Rs 10 lakh crore for farm sector along with several initiatives for helping agri-produce to get better prices will be the growth drivers for the farm sector besides favourable weather conditions and good monsoon.
The housing sector has also suffered a lot from the demonetisation drive and thus it is good to see the finance minister paying adequate attention to this sector. Infrastructure status accorded to affordable housing is a welcome development.
Digital economy
Abolition of the Foreign Investment Promotion Board (FIPB) is a great signal to the foreign investors about furthering of reforms and ease of doing business in India.
A boost to the digital economy by way of stepping in telecom infrastructure would bring in more transactions in the formal sector.
The reduction of corporate tax for the small and medium enterprises with turnover less than Rs 50 crore is a positive development. This will also go a long way in attracting more investments in the country.
It will surely give the domestic business a massive push and indirectly help the country in restoring its healthy GDP growth. However, further pruning of income tax and corporate tax rates could have been considered to accelerate consumption and investment demand.
All in all, it is no-frill and business like Budget that is high on capital expenditure spends, doing away with the plan and non-plan distinctions. With advancement of the Budget presentations and early passage by Parliament, the quality of the government expenditure would improve as well.
We now look forward to the details of the forthcoming policies which have been outlined in the Budget.
(The author is the President, The Associated Chambers of Commerce of India-Assocham)