The forthcoming financial year is riddled with both challenges and opportunities that can emerge from global events and policy changes. As a nation, we have to be prepared for external disruptions. More importantly, we have to bring in fresh thinking, imagination and innovation into policy making. Through this Budget the finance minister has played a commendable balancing act between earning tax revenues and expenditure.
The Budget neither focuses on garnering more tax money for the government nor on opening up the government coffers that derails fiscal prudence. It is in line with the overall trend of making it a predictable and incremental policy announcement, rather than a source for speculation and disruption in the economy. The focus will now move towards ongoing policy measures that will be taken through the year — the most important being the rollout of the GST.
Having said that, we do see various elements in the Budget that show government’s strong motive towards strengthening the economy. Reduction in income tax rate for the lowest slab from 10% to 5% will provide fiscal stimulus of around R14,000 cr in the hands of over 1 crore people.
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The food and agricultural sector is critical for the nation’s progress and with overall spends going up by around 24%, it will strengthen the faster growth we have witnessed in this sector during the past year. The fund to boost the dairy-processing sector, the plan to introduce modern law on contract farming, strengthening of agri markets and aligning the spot and derivatives market with the commodity market will further modernise the sector.