​​​
  1. Union Budget 2017: Arun Jaitley provides boost to consumption and retail

Union Budget 2017: Arun Jaitley provides boost to consumption and retail

It is usual to have a plethora of expectations from the Union Budget, and a yearning for so-called “big-bang” reforms and announcements.

By: | Published: February 2, 2017 7:15 AM
Expectations leading to this Budget were further heightened in the wake of recent demonetisation, as well as the forthcoming elections in five states. (PTI) Expectations leading to this Budget were further heightened in the wake of recent demonetisation, as well as the forthcoming elections in five states. (PTI)

It is usual to have a plethora of expectations from the Union Budget, and a yearning for so-called “big-bang” reforms and announcements. Expectations leading to this Budget were further heightened in the wake of recent demonetisation, as well as the forthcoming elections in five states. It is, therefore, easy for some to feel disappointed at the lack of theatrics and big-bang reformist fireworks in the Budget. However, it is consistent in direction with the previous two budgets of the current NDA government, as well as the economic ideology being espoused by the PM in his various speeches and actions in the last 32 months.

Budget 2017 gives enough reason to feel optimistic about the nation’s economy in general, and a noticeable boost in consumer spending (and, therefore, better prospects for Indian retail) in the quarters to come.

The current NDA government has been consistent in its focus areas and these have been reiterated in this Budget speech too, for making India a more efficient country to do business in, and more inclusive for its 127 crore citizens. The very substantial hike in government spending in various areas and schemes, such as infrastructure, rural and affordable housing and MNREGA, a very significant reduction in income rates for those having annual incomes below Rs 5 lakh (and relief for all individual taxpayers below Rs 50 lakh annual income), and a hike of Rs 100,000 crore in lending to the farm sector will steadily yield more visible results by way of better capacity utilisation of core industries such as steel and cement and capital goods producers, higher job creation and improving the rural economy in particular. Finally, it is also a very welcome move to come out with specific schemes for the leather and footwear sector, since this sector can also create a large number of jobs, especially for those in the underprivileged strata of society, and can also generate some additional export income for the country.

You may also like to watch:

There is also another very significant announcement in this Budget by way of reduction of income tax rate by 500 basis points (peak rate now 25%) on companies whose turnover is up to Rs 50 crore (up from Rs 5 crore now). It is very difficult to estimate the direct impact of this major tax reduction, since some of the tax saved by such medium-scale enterprises will be retained as earnings for further expansion.

The cumulative impact of all of these changes is likely to give a more steady boost to private consumption in general, and more specifically, rural consumption. The retail sector should see continuing steady growth, and good profitability for well managed businesses.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top