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An increase in the income limit for Rajiv Gandhi Equity Savings Scheme (RGESS) for first time investors, additional deduction of income on small ticket home loans for the first time borrowers and introduction of inflation-indexed bonds are positive moves to arrest the dwindling savings rate. A number of steps have been announced to boost the overall investment rate in the country as well.
Containment of fiscal deficit to GDP ratios at 5.2 per cent in FY13 and 4.8 per cent in FY14 through rationalisation of subsidy expenses and increased tax revenues are testimony to the government's commitment to fiscal consolidation. Improved savings and investment rates combined with fiscal prudence will enable the country to return to its high growth phase sooner than later.
The Union Budget FY14 has been very positive for the financial sector as it has paid special attention to the issues like improving the international competitiveness of the sector and making public sector banks more sound. A reformist idea to set up India's first women's bank, to lend mostly to women and woman-run businesses, support women's SHGs and women's livelihood, with the capital support of Rs 1,000 crore augurs well for India. In short, the Budget has tried to embark on the path of sustainable development through improved inclusiveness.
SS Mundra
CMD, Bank of Baroda
CMD, Bank of Baroda
