Finance minister Arun Jaitley’s first full-year Budget is definitely path breaking in more ways than one with bold initiatives to revive investment and growth. More importantly, it is designed to provide a clear road map to the economy in the medium term.
The finance minister has rightly taken the liberty to stretch his fiscal deficit target to 3.9% to prop up investment in the economy. Priming up investment in infrastructure has clearly been a key focus area. The Budget deftly addresses the priorities of growth and inclusion. Proposed simplification of the tax regime and clear pronouncements with regard to ease of doing business make the Budget friendly to both the corporates and the middle class. New social security schemes like pension for all and housing for all by 2022 could be powerful measures to make growth inclusive in the long run.
Pre-existing regulatory mechanism to start new projects can go a long way in promoting entrepreneurship. Removal of special additional duty on select IT products is a positive development for the IT manufacturing. Allowing 100% deduction for Swachh Bharat Kosh and Clean Ganga Project is a welcome initiative, but the intent to impose a cess on Swachh Bharat needs to be reconsidered given that corporates are already spending 2% of profits on CSR.
There is a conscious attempt to improve flow of credit to the agriculture sector. Added investment in rural infrastructure and micro irrigation can help drive growth in agriculture, which still accounts for a big chunk of labour employment. The proposed National Unified Agri Marketing Policy will not only help reduce wastage in fresh produce but help control inflation and most importantly make agriculture remunerative for the farmers.
Both secondary and higher education have received the required attention. Upgradation of 80,000 secondary schools and opening of new institutes of excellence like IITs and AIIMS in smaller states will definitely make education more accessible. The National Skills Mission will help create a conducive eco system for revival of manufacturing.
Overall, Budget 2015-16 appears balanced and inclusive in orientation.
By Rakesh Bharti Mittal