By Ashish Kapur

Union Budget 2019/Budget 2019: The first and foremost focus of any government in an election year is to get re-elected. Hence a budget speech barely two months before the General Elections of 2019 start rolling was expected to have a lot of political colour. To this extent one can safely say that the interim Finance Minister, Mr Piyush Goyal, has not disappointed us in any way. Also given the rural distress the focus on agriculture and farm income was also no surprise. Even the assurance of minimum Rs 6000 per year assistance to small farmers came within the expected amount of stimulus to be given to the rural sector. Other benefits like the farm loan interest rate subvention, the unorganised workers pension are all attempts to cover all the poor sections of the society with some relief and economic help.

Beyond the anticipated politics and the related rhetoric, the budget certainly has many positive and encouraging features. For one continued focus on infrastructure is a welcome sign. The announcement of an autonomous computerised system of interaction between tax officials and tax payer is a great move. No human interface will significantly reduce corruption, harassment and inconveniences faced by tax payers.

Vision document for India 2030 was a great aspirational statement. An India having a 10 trillion dollar economy with improved social and physical infrastructure, spearheading the transport revolution with electric vehicles and achieving various other milestones like an astronaut in space, drinking water, healthcare and wellness for all are sure to ignite the passion of the aspiring class and serve as a good roadmap in the years to come.

For the first time we had a Finance Minister thanking the tax payers for their contribution to the overall economic growth and this is certainly very praiseworthy. Exempting tax for assesses earning between Rs 2.5 lakh and Rs 5 lakh per year is indeed a pathbreaking step. It will provide a very significant relief to the lower middle class. This will also boost economic growth by giving a very meaningful stimulus to consumption.

Real estate sector also got some welcome relief in terms of lowering of GST for home buyers, extension of section 54 benefits to two residential houses and notional rent provision trigger on completed residential houses raised from one year to two years. All these are very welcome moves to revive sentiments in a beleaguered sector.

Given the upcoming General Elections and the political pressures to ease rural distress, this budget is a very responsible statement. The best thing was there was no loan waiver and no significant fiscal slippage despite significant economic benefits being passed on to the weaker sections of the society. Markets and economists would specially like the option of direct transfer over a loan waiver. Loan waiver creates an imbalance and spoils credit discipline while a direct transfer is more inclusive and helps increase consumption and economic activity besides the obvious social and political benefits. The overall revenue and expenditure assumptions appear reasonable.

On the whole, it is a very innovative and positive budget. Help has been extended to the marginal sections like small farmers, unorganised sector workers and the lower middle class. Again help has either been given by direct transfer, pensions or tax benefits. Importantly there are no loan waivers, no unsustainable populist measures and most importantly, no significant deviation from the fiscal consolidation road map. Given all the constraints and compulsions, the Finance Minister has done well to create a feel good factor without disturbing economic stability.

Ashish Kapur is CEO, Invest Shoppe India Ltd