Although the Budget 2016-17 has no “Big Bang” announcements for the Corporate Sector and urban audiences, it has a clear focus to benefit the rural and farm sectors. The budgetary proposals clearly aim not only to improve rural infrastructure but also provide facilities which would enable self-employment opportunities, skill enhancement, easy access to farming and protection against adverse impact of calamities through insurance schemes.
The government, in its full wisdom, has realised that a pro-rural and farm sector slant is critical not only for the national economy but their political objectives as well. The rural development schemes, as proposed, should also bring a lot of cheer to the infrastructure industry; as the road, irrigation and housing projects to be built there would translate into a substantial demand for construction as well as manufacturing companies in the steel, cement and construction material sector. Likewise, government’s enhanced focus on rural electrification schemes would also translate into demand for electrical equipment manufacturers.
Government’s decision to increase the planned & unplanned expenditure by 12% and railways together with road sector’s budget increase by 27% is indeed a very positive news for the industry.
For the corporate sector, there are no landslide announcements barring a few tweakings which would result in an additional R20,000 crore of revenue for the exchequer. There has been no reduction in the corporate tax rates or MAT. A drop in these rates would have facilitated private sector’s investment either directly or under PPP model.
The government after much debate seem to have cast their vote in favour of honouring their fiscal deficit target of 3.5% which would bode well for India’s credit rating as well as stability of its currency.
Several allocations have been made for a multitude of initiatives including sanitation drive, basic education & skill enhancement and healthcare & social security for the poor. That qualifies the Budget to be seen as one for ‘masses’ with a lot of ‘human touch’.