Finance minister Arun Jaitley’s nine-pillar Budget has ticked all the right boxes; well, almost all. It’s a balanced Budget that seeks to move away from offering freebies to promoting investments, while focusing on maintaining fiscal deficit and improving the quality of life in rural India. It is encouraging to see that fiscal discipline has been given priority, with an emphasis on growth and development.
Union Budget FY17 was going to be a tough balancing act for the finance minister, given the strong headwinds on both the global and the domestic economic front. And he has managed it well. With a plethora of announcements—be these in the form of greater focus on farmers and rural development, promoting investments in infrastructure and healthcare and opening up FDI in food processing—the finance minister has taken positive steps that would not just boost overall confidence, but also go a long way in generating employment.
His focus, this year, has clearly been on empowering the farmers and people in the hinterland, who have been in the woods in the recent years. His intent is clearly to double the income of farmers in the next five years. Improving connectivity from farm to market, fast-tracking irrigation projects, provision towards interest subvention for farmers and a crop insurance scheme are also steps in the right direction. These steps will help our millions of farmers recover from the rough patch they have been going through, and go a long way in boosting confidence and fuelling consumerism in rural India.
With his income-tax proposals, the finance minister’s focus has been on empowering the man on the street, with tax rebates for individuals with net income of up to R5 lakh and tax relief on house rent allowance etc. This would provide some relief to salary earners, and put more money and more savings in the hands of the common man. One can argue that more could have been provided by the minister for recapitalisation of banks, but he has certainly left the window open for the same in the future.
Enhanced allocation towards the roads and highways sector by around 22% is another big positive for the industry—we welcome the minister’s renewed focus on improving infrastructure. Providing good infrastructure, particularly improving connectivity to the hinterland, has been mentioned as a thrust area for the government. The government has continued the rural focus, with enhanced allocation towards MNREGA, besides focusing on skill development for rural youth. These initiatives would help promote entrepreneurship among the rural populace, add jobs and put more disposable income in the pockets of the rural consumer, improving their standards of living and ensuring continued rural demand for branded consumer goods.