Budget 2018: The UK India Business Council (UKIBC) today welcomed the Budget proposals and said that the government’s Rs 80,000 crore disinvestment and 3.3 per cent of fiscal deficit targets for 2018-19 are achievable. “The governments success in its disinvestment programme should give the markets confidence that the Rs 80,000 crore disinvestment target for 2018-19 is achievable and that a fiscal deficit target of 3.3 per cent of GDP can be met,” UK-India Business Council group CEO Richard Heald said in a statement here. The UK India Business Council, is a membership-based organisation works with businesses in both countries, as well as the UK and Indian governments, to promote bilateral trade. In his initial reaction on the Budget, Heald said, in mid-January, employment, investment and alleviation of rural poverty were announced as the three pillars of the Budget handed down today.
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The imposition of a 25 per cent corporate tax on MSMEs with turnover of less than Rs 250 crore is yet another step in the right direction and statements around infrastructure – particularly the expansion of airport capacity – as well as private investment/ involvement in the defence sector are encouraging measures. However, the failure to grasp the opportunity to simplify the overall tax regime, the introduction of yet another slab within corporate tax and the introduction of LTCG tax while retaining STT being two examples, risk perpetuating two key negatives surrounding progress on ease of doing business. Perhaps most impressive is the the message to domestic and foreign investors, namely the government is not being deflected from continuing structural reforms ahead of a general election within the next 15 months, he said.
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The focus on populist measures such as a 150 per cent rise in the minimum support price for kharif crops, the encouragement of farmer-producer companies, the ring fencing measures on the saving of the elderly and the governments contributions for new employees into the employee provident fund and most importantly the new medicare provisions to cover as many as 100 million families were carefully calibrated for maximum effect to the various audiences, he added.