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The
Finance minister’s budget speech was very compelling. He gave me an impression
that he has broadly met everyone’s expectations. The fine print of the budget
needs to be carefully analysed to understand the impact that this budget would
have. Now, it is about delivering what is required to achieve the key points of
the 2015 budget proposal, which doubles up as a very good vision document on
the direction of the Indian Economy. I think the Finance Minister has
touched upon a lot of key areas, but now it is about delivering on the positive
proposals put forth in this budget.
In
terms of addressing key constituencies, the Finance Minister did a good job of
addressing both the social sector and the corporate sector. This budget has
certainly raised important questions in the realm of resource management. How
do you raise resources and how do you free up resources? The measures taken to
monetize gold is a key step forward. Moreover, the budget has made a strong
attempt to put money back in the hands of the people. Raising Health Insurance
Premiums exemption limit, increasing National Pension Scheme contribution
exemption limit along with increasing Transport Allowance exemption effectively
means that an individual tax payer can save up to Rs. 4,44,200.
The
easing of corporate tax is definitely going to bring cheer to corporates, as it
will relieve them of a high tax burden and they can direct their resources to
making Investments that help India grow. In terms of other taxation reforms,
the government has made a positive move by ensuring that the Wealth Taxes are
abolished and 2% surcharge is added to tax individuals whose taxable income is
above 1 crore. Apparently, this measure will bring in an additional Rs. 9,000
crores into the government coffers and hence, it is a positive proposal.
Addressing
the “Make In India” Mantra
The
Finance Minister rightly touched upon the fact that the Skill India and Digital
India initiatives are drivers for “Make In India”. The thrust laid on
indigenous defence production as well as the focus on renewable energy will
certainly push the agenda for “Make In India” forward.
Infrastructure
Push
There
has been a corpus of Rs. 70,000 crores allocated to Infrastructure, which will
definitely lead to the development of major infrastructure projects. Along with
the proposal to set up major power plants, the infrastructure push in this
budget is set to surge India ahead. The proposal to revitalise the PPP model
for infrastructure development and the subsequent bearing of majority risk by
the govt. will definitely yield positive results for infrastructure.
Additionally, the tax – free bonds in rail roads and irrigation projects will
spur investments in critical infrastructure.
Laying
the Groundwork to Enable ‘A Startup Culture’
I
was impressed by the Finance Minister’s announcement of the Atal Innovation
Mission to be established which will draw on expertise of entrepreneurs, and
researchers to foster scientific innovations. An allocation of Rs. 150 crores
has been made for this purpose. Moreover, it is heartening to see the Finance
Minister to allocate Rs. 1000 crores for start-ups. Although, the fine print
will give more clarity on this allocation, but nevertheless it is a boost. The
talk of creating world class incubators is welcome, as long as they facilitate
the creation of incubators by people who know the business.
Access
to Health
Healthcare
is probably one of the sectors, which hasn’t been given the due importance in
this budget. The Finance Minister could have proved its commitment to the
universal health coverage and increased public health spending. This was one of
the areas, where the budget could have done much more and clearly it failed in
this regard.
Having
said that, the setting up of AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu,
Himachal Pradesh, Bihar and Assam pushes forth Healthcare education and
research in these states.
Conclusion
The
Finance Minister has certainly laid a very positive roadmap for the future. One
can only hope that the govt. delivers on its budget proposals in an effective
manner and reaches the destination that it has shown. Clearly, India is Poised
and the Flight Path is cleared for takeoff!
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