Anand Rathi said that financial inclusion by digitalization, improved access to credit for the poor, MSME, start-ups would be some of the major areas of focus by the government.
The forthcoming general budget to be presented in Parliament by Finance Minister Arun Jaitley on February 1, 2017 is likely to boost rural consumption, increase financial stability and security for the poor. Brokerage firm Anand Rathi in its report on Monday stated that the government would focus on greater allocation of welfare schemes aimed at the weaker section. Anand Rathi said that financial inclusion by digitalization, improved access to credit for the poor, MSME, start-ups would be some of the major areas of focus by the government.
To revive investment the government will try to improve conditions for doing business, the report said. Increased capital spending on infrastructure, especially on roads, power transmission, defence, low-cost housing and the railways, would be some other areas of focus. The report also went on to say that the government would focus on employment generation. “Demography is both the advantage and vulnerability of the economy. Creation of self-employment opportunities in the service sector. Job creation in NREGA would be linked to infrastructure development,” it said.
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Budget 2017,Anand Rathi ,NREGA, Arun Jaitley, Finance Minister, Parliament, Brokerage firm, February 1, 2017, Union Budget
Anand Rathi also highlighted some macro actions that the government could take in the forthcoming Union Budget:
1. The government government is likely to lay greater greater emphasis emphasis on growth than on meeting meeting the fiscal consolidation consolidation target. At the same time, we expect the Finance Minister to adhere to the fiscal-consolidation roadmap in the budget figures. A shift from a specific number to a budget-deficit range will provide greater flexibility for more public investment
2. Increase Increase personal personal disposable disposable income by making income-tax slabs more favourable favourable; raising raising the standard standard-deduction deduction limits to primarily benefit the relatively low-income group
3. Incentives to increase financial savings (FDs, mutual funds) and disincentives to physical savings (gold, real estate)
4. Interest Interest subvention subvention and/or capital capital-subsidy subsidy schemes schemes for skill-formation formation, start-ups, affordable affordable housing housing, green initiatives initiatives, SwachhBharat-related initiatives – sanitation and potable water projects
5. More incentives for digital payments and dis-incentives for cash transactions
6. Indirect tax rattionalisation keeping in view the implementation of GST from July 1, 2017. Higher rates for service tax would be negative (e.g. for media, restaurants., technology)
7. Measures to improve ease-of-doing business and investor sentiment, which can include definitive steps to revive stalled projects projects and investments investments. Incentives Incentives and sops for start-ups likely to be rolled out
8. Banking reforms and bank capitalisation – addressing the issue of stressed assets in the banking sector; reducing government stakes in PSUs, likely.