Apex industry body ASSOCHAM congratulated Prime Minister, Mr. Narendra Modi and Union Finance Minister, Mr. Arun Jaitley for giving a truly workman and business-like Budget, with a great focus on rural economy, digitisation, small and medium enterprises, small income tax payers and importantly bringing reforms in political funding.
“Post demonetisation, rural landscape had come under stress along with the SMEs and the informal sectors of the economy and needed a boost. Credit commitments of Rs 10 lakh crore for farm sector along with several initiatives for helping agri-produce to get better prices will be the growth drivers for the agricultural sector besides favourable weather conditions and good monsoon in 2017,” said ASSOCHAM President, Mr. Sunil Kanoria.
“The proposal on a model law on contract farming and involvement of states in easing of the APMC would be a game changer for the agriculture sector,” he added.
Mr. Kanoria also said, “Though the Budget has used a little elbow room, pegging the fiscal deficit at 3.2 per cent for 2017-18, it has rightly chosen to traverse the path of fiscal consolidation by limiting the market borrowing. It would certainly help keep inflation in control. The macro credibility of the Indian economy has been kept intact.”
“Abolition of the Foreign Investment Promotion Board (FIPB) is a great signal to the foreign investors about furthering of reforms and ease of doing business in India. A boost to the digital economy by way of stepping in telecom infrastructure would bring in more transactions in the formal sector,” said the ASSOCHAM chief.
Complementing the reduction of corporate tax for the small and medium enterprises with turnover less than Rs 50 crore he said, “This will also go a long way in attracting more investments in the country. It will surely give the domestic business a massive push and indirectly help the country in restoring its healthy GDP growth forecast.” However, he added that the India Inc. was expecting it for large firms as well. “At least the glide path towards lower corporate tax is clear; so is the case with the personal income tax, even though the relief is limited to those earning up to Rs 5 lakh.”
The Budget also removes uncertainty with regard to long-term capital gains tax on equity, and gives a boost to the infrastructure and housing sectors. “The focus on investment in infrastructure would fill in the gap created by subdued investment from the private sector. Coupled with lower interest rate regime, we expect the demand creation to pick up.”
Commending the government’s focus and commitment towards creating a cashless economy, he said, “The various reforms towards up gradation of digital infrastructure, along with grievance handling system in the budget will help in transforming India into a cashless and transparent economy, and will help in tackling corruption and clean up the system.” Also, for the war on black money, the move towards introducing transparency in political funding by way of electoral bonds and limiting the contributions to the political parties to Rs 2,000 will bring about a great change.
“Steps to bring transparency in political funding, and no cash transactions beyond Rs 3 lakhs are in right direction. Public at large would support all other moves against black money if political reforms are initiated and implemented; so, it is a good beginning,” he added.
All in all, it is no-frill and business like Budget that is high on capital expenditure spend, doing away with the plan and non-plan distinctions. With advancement of the Budget presentations and early passage by the Parliament, the quality of the government expenditure would improve as well.
“We look forward to the hike in capital spending in various infrastructure sectors. Since affordable housing will now be given infrastructure status, interest rates are expected to be brought down for rural housing,” Mr. Kanoria said.