The Budget, with the limited availability of the fiscal space, attempted to bring fiscal consolidation with a lower fiscal deficit of 4.8% and simultaneously made higher allocations to various schemes to spur investments.
Announcing a 15% incentive for acquisition and installation of new plant and machinery by manufacturing companies during the period beginning April 1 and ending March 31, 2015, is a welcome step to boost investment.
Higher allocation of 29.4% towards Plan expenditure and increased outlays for social infrastructure, education, rural development, health and urban development are also expected to stimulate economic activity.
As most of the projects are stalled due to regulatory and bureaucratic delays, the expectations from the Budget to ease the process of clearances is not met since the effectiveness of the Cabinet Committee on Investment is yet to be established.
It is a matter of concern that the total non-Plan revenue expenditure ? particularly interest payment and subsidy ? remain at elevated levels. It is also challenging to achieve an increase of 19% in tax revenues when the economy is slowing down and there are no immediate signs of recovery.
However, a lower fiscal deficit, the announcement of introduction of the Direct Taxes Bill in this Budget session and possible roll-out of the goods and services tax are encouraging takeaways from this Budget.
