Indeed, it’s a Budget ‘like never before’

February 3, 2021 1:40 AM

One section where the Budget lacks is demand incentives, which needed support. Time-bound and proper implementation of various measures tops the wish-list of many Indians.

Budget proposals have continued the government’s strong focus on digital, with the announcement about setting up a fintech hub at Gift City. 

By Niranjan Hiranandani

In india first ever digital Budget, the FM came up with proposals that are growth-oriented and will mark the transition from ‘survival’ to ‘growth’. No direct taxation is a positive for an economy grappling with the effects of Covid-19.

For home buyers, the extension of deadline till March 31, 2022, for additional `1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project, is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022. Tax exemption for notified affordable housing for migrant workers and deduction on payment of interest for affordable housing being extended by a year will give a fillip to this segment.

From a real estate sector perspective, setting up a long-term development financial fund will create additional lending options and address liquidity constraints. The renewed focus on privatisation and recapitalisation of banks is important.

No bringing in a Covid-19 tax was the biggest relief. The proposals to privatise two PSBs and one general insurance company are noteworthy, as is the increase in FDI limit in insurance to 74%. The proposal to set up a DFI should boost capex. Tax buoyancy, successful divestments and quick monetisation of operating infrastructure assets remain the key to achieving the fiscal deficit target for FY22.

One section where the Budget lacks is demand incentives, which needed support. Time-bound and proper implementation of various measures tops the wish-list of many Indians.

Niranjan Hiranandani, MD, Hiranandani Group

As the PM pointed out, last year saw mini-budgets; the unsaid thing for most industries across the economy is that similar steps may happen with more positives in the offing through the upcoming fiscal. Continued focus on “minimum government, maximum governance” will enhance ease of doing business, while the proposed stimulus to infrastructure spend is spectacular—roads, ports, airports, gas pipeline, warehousing, metro lines, etc. This government spending will provide stimulus for GDP growth, and is laudable.

Budget proposals have continued the government’s strong focus on digital, with the announcement about setting up a fintech hub at Gift City.  Due importance has been given to migrant workers across industries who have been provided for with minimum wages and social security being extended. A long-term development financial fund, as also taking over of bad debts by banks and thrust to disinvestment is commendable. Recapitalisation of banks is a step in the right direction. To conclude, I would complement the FM for largely delivering on her promise of a Budget ‘like never before’.

The author is MD, Hiranandani Group

 

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