Finance minister Arun Jaitley has not introduced ‘big-bang’ reforms, but he has definitely cracked open the sluice gates for economic benefits to flow in over the next few years. Importantly, the FM has addressed both the corporate and social sectors in this Budget.
The Budget will improve business sentiment and spur investment by domestic as well as overseas players in the country through easier regulations and an improved tax regime. The reduction of corporate tax from 30% to 25% and the rationalisation of various tax exemptions over the next four years are significant.
The road map for the Goods and Services Tax (GST) has been laid out and will bring India on par with developed economies. The deferment of the controversial GAAR by two years and its application prospectively will reassure investors. The simplification of regulations around foreign investments will encourage inflow of foreign funds. The introduction of a modern bankruptcy law is a welcome step towards ease of doing business.
The Atal Innovation Mission with an outlay of R150 crore is a step in the right direction, but is more in the nature of modest seed funding to ‘Innovate in India’. The R1,000-crore Self-Employment and Talent Utilization fund for incubating start-ups is positive, but it will achieve its goals only if implemented effectively. While these are positive developments, they fall short of giving a turbo boost to the ‘start-up culture’ in India. The introduction of special incentives and tax sops for angel investors would have ushered in a more conducive start-up environment.
The FM rightly touched upon the fact that the ‘Skill India’ and ‘Digital India’ initiatives are drivers for ‘Make in India’. The thrust on indigenous defence production and renewable energy will certainly push the ‘Make in India’ agenda forward. However, I expected more granularity for the implementation of ‘Make in India’ programme.
‘Skill in India’ is a critical enabler for ‘Make in India’. The Budget has attempted to introduce measures to kickstart the skilling of youth in India.
The announcement of a National Skill Mission and the R15,000-crore Grameen Kaushal Yojana targeted at skilling rural youth will address this need.
The move from ‘Jan Dhan’ to ‘Jan Surakhsa’ is a big reform that will go a long way in ensuring social security for the poor and senior citizens.
The proposed Universal Social Security System is perhaps the most important reform, which, I hope, in time will be linked to universal healthcare. Enabling India to become a pensioned society from a pension-less society and encouraging health, accidental and life insurance are also landmark initiatives that need to be applauded.
Overall, the Budget is a clear road map for investment and growth. However, the government must ensure implementation and delivery of all these proposals. I will rate the Budget a 7 out of 10.