The finance minister provided a blueprint of what the government plans to achieve. The welcome measures include a road map for fiscal consolidation of three per cent of GDP by financial year 2016-17, a GST roadmap by the end of the year, controlling non-plan expenditure and a stable and predictable tax regime.
While achieving a 4.1 per cent fiscal deficit target is challenging, an increased Plan expenditure channelises Rs 5.75 lakh crore of tax payers' money for productive purposes.
Public-private partnership in infrastructure has rightly made into the government's priority list. While the regulatory relief announced for banks in the form of lower SLR and CRR for infrastructure lending is a positive step, it is also necessary to mirror similar measures to infrastructure finance firms.
Increase in the tax exemption limits is a relief for the common man. The plans to invigorate warehousing sector and establishing a price stabilisation fund should improve the supply bottlenecks, easing inflation. Investment allowance for investments over Rs 25 crore would benefit small and medium enterprises significantly. The increase in FDI in insurance and defence should bring investments to these sectors. Overall, the Budget is commendable, given the time constraints for the new government. Deft implementation is now the key.
Y M Deosthalee
CMD, L&T Finance Holdings