The Union Budget 2017-18 assumed more importance than a conventional Budget because of the extraordinary environment in which it was being presented.
Finance minister Arun Jaitley’s Union Budget for 2017-18 ticks all the right boxes and is consumption-focused—it will help drive consumerism, particularly at the bottom of the pyramid. The finance minister’s heightened focus on rural India with higher allocation for MNREGA, increased spending on infrastructure and fighting poverty would go a long way in improving consumer sentiments in the hinterland.
Jaitley’s Budget this year may not have any big bang announcements, but the small and definite measures are aimed at improving the quality of life in rural India. The income-tax rate cut to 5% for individuals with income between R2.5 lakh and R5 lakh is a big positive that would put more disposable income into the pockets of the common man.
The Union Budget 2017-18 was expected to be focused at boosting consumption, and the finance minister has managed it well. With a plethora of announcements — be these in the form of greater focus on farmers and rural development, higher investments in infrastructure and livelihood, improving connectivity with the hinterland and rural electrification—the finance minister has taken positive steps that would not just boost overall consumer confidence, but also go a long way in generating employment.
His focus, this year, has clearly been the farmers and people in the hinterland, and rightly so. After successive years of poor monsoon rainfall, rural demand has been struggling and a dose of stimulus was the prescribed medicine to bring it back on its feet. Providing good infrastructure, particularly improving connectivity to the hinterland, has been mentioned as thrust area for the government. I am quite happy with the government continuing the rural focus and enhancing allocation to MNREGA to R48,000 crore. The skill development initiative for the rural populace would help promote entrepreneurship in the hinterland. These initiatives would not just strengthen the hands of the rural poor, but also help put more disposable income into the pockets of the rural consumer, improve their standards of living and ensure continued rural demand for branded consumer goods.
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The only disappointment is the absence of any cut in corporate tax rate for larger firms, which most people had expected. However, the selective reduction of corporate tax rate for companies below R50 crore turnover would surely encourage higher compliance at the lower level of the corporate pyramid.
Sunil Duggal, Chief Executive Officer, Dabur India