Budget 2018: Lately, the finance ministry has faced a lot of ire due to demonetization and GST. Many of us would agree, both the mammoth exercises could be done with better execution to make the things more comfortable for the common man and small businesses.
Budget 2018: As the mercury dips in Delhi, the temperature in Finance ministry gets rising. Lately, the finance ministry has faced a lot of ire due to demonetization and GST. Many of us would agree, both the mammoth exercises could be done with better execution to make the things more comfortable for the common man and small businesses. For instance, the hotel and hospitality industry were slapped with 28% slab and then lowered to 5%. It has created a lot of confusion and inconvenience to both hotel owners and consumers. However, I would give the benefit of the doubt to the government as well; given the size and expanse of the implementation, nothing can be assumed to be perfect.
After the feedback, the government did take quick corrective action swiftly and resolved the confusion. Indeed, Budget 2018 raises the expectation for everyone in the country – from homemakers to corporate honchos, and they eagerly await the announcements. This won’t and should be a conservative budget (read populist). The government will announce the last round of reforms before starting to prepare for the next general elections in 2019. Listening to the speeches of the leaders can give quite a direction to where the budget 2018 is heading.
Recently, the central government announced the divestment of Air India. Hence, we can assume the favourable policies for the airline industry in the coming months. The focus will be providing benefits SMEs, job creations and easing of the norms.
From Vibrant Gujarat to Bengal Global Summit, states are wooing foreign investors
The October to February season is also the investment conference season in India. In the last decade or so, this busy conference season has become more energetic given the gala ‘investment summits’ organised by respective state governments. This frenzy started with Modi’s Vibrant Gujarat, and now practically every state organises these conferences. Another aspect of these conferences is related to the Budget 2018 (both state and central). The speeches of policymakers reflect upon the mood of the government and how the coming budget 2018 would affect both industry and consumer.
Also watch: Budget 2018: FM Arun Jaitley May Tweak Income Tax Basic Exemption Limit
The latest in the offering was ‘Bengal Global Summit’ and then another big one coming up in February, the ‘UP Investment Summit’. Mr. Yogi is not leaving any stone unturned to lure the investors; he has visited many cities to invite industries to come to Uttar Pradesh. He has promised to make the provide suitable investment climate to the investors. With this exercise, one can safely assume the direction of Uttar Pradesh budget is moving towards pro-industry promoting agriculture, textiles, services and manufacturing.
Other states CMs as Odisha, Andhra Pradesh, Assam are going pillar to post to woo the investors. Prime Minister Modi is not left behind; he is rooting for India at Davos. For foreign companies, this is the best time to come to India and invest. Valuations are right, and there is a red-carpet welcome practically in every state of the country. So are we looking at 8% plus GDP growth in 2018? Well, I am optimistic.
Dr Nikhil Agarwal is Fellow of IC2 Institute, University of Texas at Austin. He is former CEO of Innovation at Andhra Pradesh Innovation Society (APIS). Dr. Agarwal is alumnus of University of Cambridge in England. He is on Twitter @nikhilagarwal7