Budget 2016: Finance Minister Arun Jaitley had the tough task of balancing the measures for providing growth stimulus to the economy vis-à-vis meeting the fiscal deficit target. I believe the finance minister has walked the tightrope well and he has managed to do so without any ‘negatives’. There has been no increase in the service tax or long-term capital gain tax, etc.
On an overall basis, the focus on developing 300 rural urban clusters is beneficial to the process of smooth urbanisation. Similarly, there are several other announcements pertaining to agriculture and rural sector– irrigation, roads, soil health and crop insurance. Not only will they bring much-needed focus on ‘Bharat’, they will also boost the consumption in rural India. At the same time, the Budget provides relief to small tax payers numbering over two crore, mostly in urban areas.
A very positive initiative that has been announced in this Budget is the focus on regional connectivity through air. The proposed investment of Rs 50 crore-100 crore to rejuvenate 160 airports in partnership with the state governments will provide much-needed boost to the civil aviation sector in India.
The world economy grew at 3.1% in 2015 against 3.4% in 2014. For India to target 7-7.75% growth rate and still keep the deficit at 3.5% is creditable, which will contain the inflation and allow Reserve Bank of India to re-calibrate rates.
By S.P. Shukla, Group President & CEO – Aerospace & Defence Sector Member – Group Executive Board, Mahindra Group