Union Budget 2015-16 presented by the finance minister in the backdrop of high expectations has the distinct touch of the new regime. It has steadily continued the process of building the platform for long-term growth without falling to the temptation of populism.
The Budget is on several counts a step in the right direction. The commitment to meet India’s fiscal gap target of 3% by FY 18 is a redeemable aspect of the Budget. It is a commitment to fiscal consolidation and should be well received by global investors and domestic savers. The resolve to implement GST from FY16 will augur well for industry. Gradual reduction of corporate tax rate to 25% over the next four years will spur domestic investment and accelerate growth.
The acknowledgment of gold consumption in the country with the introduction of the Gold Monetisation Scheme is an encouraging initiative, which will help convert the physical asset to a liquid financial asset.
The proposed gold coins with the Ashoka Chakra will also encourage recycling of gold among domestic consumers and give a fillip to ‘Make in India’. The resolve of the government to discourage cash-based transactions augurs well. However, the implementation will have to be in a phased manner considering the fact that a significant class of consumers of gold and gold jewellery, especially in rural India, may not have a PAN card and are yet to be integrated into the nationalised banking network. This move may trigger more purchase from the unorganised sector leading to a loss to the exchequer. Therefore, it is imperative that the government introduces a stringent implementation framework, which ensures compliance.
The Budget has also emphasised on the need to provide housing and healthcare in the real India and continues to encourage infrastructure in the country. It is heartening to see the attention given to the often neglected sections of the society, especially the senior citizens and the physically challenged. In this context, the move to upgrade National Institute of Speech and Hearing (NISH) in Thiruvananthapuram to the University of Disabilities Studies and Rehabilitation is commendable.
The Budget has provided clarity on the some of the issues, which will help boost investor sentiments. The platform has been laid with the Budget and it is for the industry to seize this golden opportunity.
The author is Chairman & MD, Kalyan Jewellers