Growth revival concerns remain: R V Kanoria

Ficci believes that the Union Budget has not addressed the issues related to revitalising growth. The finance minister has chosen to address the problem of fiscal consolidation through tax measures primarily by raising rates of excise duty and service tax. The broad basing of service tax is a welcome move as it will help in integrating into a Goods and Services Tax (GST). Ficci had hoped that the finance minister would compensate tight monetary policy by fiscal measures to stimulate investments. Accepting Ficci’s suggestion of removing the cascading impact of dividend distribution tax is only part of a comprehensive package of investment stimulating measures. The infrastructure sector would be benefitted by the enhancement in issuance of tax free bonds from Rs 30,000 crore to Rs 60,000 crore. In the context of uncertainty over decision making, Ficci hopes that policy initiatives, which are unrelated to the budgetary exercise, would be accelerated to bring back confidence and provide an impetus to investment and consequently growth in the economy. In the current geo-political as well as the domestic economic scenario, it is unlikely that growth targets will be met and the government shall continue to be challenged in trying to bring down fiscal deficit to 5.1 per cent.

R V Kanoria President, Ficci