Ever since this government assumed power, it has been focusing on themes such as inclusive growth for all sections of society, skill building to develop long-term capability and the ‘Make in India’ programme to promote manufacturing competitiveness. Measures to support infrastructure development, technology advancement, improving ease of doing business through policy reforms and a non-adversarial taxation regime have taken centre stage in the sustainable growth roadmap.
The Budget has ensured continuity to this implied objective. Five announcements deserve attention as they would promote investment, consumption and development. First, measures to double farmer’s income in five years, greater employment and basic infrastructure for the rural population and innovation in education are expected to positively impact quality of life. Strengthening social security systems, health care, infrastructure status to affordable housing and tax sops for the lower income group are right steps in the direction of inclusive development. Second, incentives to promote digital transactions, mini labs for soil testing, measures to make India a global hub of electronics and cyber security will promote a robust digital ecosystem.
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Third, abolition of the Foreign Investment Promotion Board, simplification in domestic transfer pricing and other related measures are expected to improve the ease of doing business. Fourth, certainty on the applicable tax rate for masala bonds and amendment of the existing Arbitration and Reconciliation Act to streamline dispute resolution mechanism, will promote foreign investment. Last, continued display of strong intent to check economic offenders via proposed amendment makes the law more effective and, coupled with the new political party funding regulation, will plug the generation of black money and lead to an increased tax-to-GDP ratio.
Overall, the Budget has no major negative surprises in these challenging times and that’s a positive.