Focus on infrastructure development by Jaitley would usher growth: ASSOCHAM

The President of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Rana Kapoor, on Saturday, said the focus on infrastructure development by Finance Minister Arun Jaitley through public resources, PSUs and major initiatives on financial inclusion by increasing the penetration of insurance would usher growth through state spending and equity.

"Re-balancing the PPP models and asking the government to take risks would motivate the private sector in infrastructure and some of the announcements like prior clearances for ultra mega projects would improve ease of doing business," said Kapoor of Jaitley's first full year budget for 2015-16.

"Tax free bonds for infra sector is also well thought out, while headroom to be given from the fiscal space to fund growth is a significant measure," he added.

Kapoor also said that correct targeting of subsidy disbursals through DBT would bring in fiscal discipline.

"More money in the hands of states would bring in growth from grassroots, reduction in corporate tax to 25 per cent from 30 per cent in a phased manner is a welcome move even though the businesses should be prepared to forego exemptions," he added.

"Other credible measures include a boost to the small and medium enterprises through Mudra Bank, major initiatives have been taken for deepening financial markets like bond markets, besides the decision to monetize gold are well thought measures," Kapoor added.

He further said that the income tax exemption limit should have been increased, to boost disposable income in the hands of consumers especially salaried class.

"The Swachcha Bharat cess should be well spent. The dampeners could be from the increase in service tax from 12 to 14 per cent while deferment of GAAR and commitment on GST are welcome measures," he added.