Finance Minister Arun Jaitley presented the Union Budget 2017 on Wednesday, February 1 at 11 AM. This union budget was historic and unique in the history of Independent India, considering the fact that it was presented on February 1, doing way with the former date of presentation on the last working day of the month. This budget was also significant due to its close proximity to the announcement of the demonetisation drive by Prime Minister Narendra Modi on November 8, 2016. Here is what Dr. Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries Ltd has to say:
“From a macro point of view, the Budget presented by the Finance Minister is a growth-oriented one with special focus on rural, agriculture and infra sectors.
Demonetisation in November 2016 resulted in a general downturn in the economy, but rural sector in particular bore the brunt. Allocation of record credit of Rs 10 lakh crore, along with a major push to the rural sector with 25% rise in MGNREGA allocation, with special focus on improving roads and electrification, no doubt, will not only ease the pain in this sector, but give it a fillip. This is indeed a welcome move which should, in due course, improve the rural economy and thereby rural spending.
Nearly Rs 4 lakh crore has been apportioned for investment on infrastructure of which Rs 2.5 lakh crore is on transportation alone. If executed well, this has the potential to provide a serious push to the economy and the Auto sector. Significantly reduced tax rates for small taxpayers of income up to Rs 5 lakh, as also some reduction in corporate tax for the MSME sector will provide demand impetus.
However one area that India Inc was really looking forward to was reduction in the corporate tax rate as promised by the FM in his Budget speech two years ago, but there is no mention of it, which is a matter of concern. No doubt, the Government has adopted a balanced approach by projecting a fiscal deficit of 3.2% of the GDP and diverting the liquidity arising out of the demonetization to public spending with a view to spur growth. However, for sustainable growth in the economy, private investments need a fillip.
Talking specifically about the Tyre sector, we were immensely hopeful that the inverted duty on rubber will be addressed in this Budget in view of the Government’s avowed move to increase value addition within the country. However, it is indeed disappointing and a matter of continuing concern that natural rubber again doesn’t find mention amongst the items on which duty inversion has been corrected.”