A workhorse Budget that desires to address an entire gamut of issues relevant for India's growth and development. The God, however, will be in its execution.
Our current challenges of high inflation and fiscal deficit, coupled with a slowdown in industrial production and a threat of weak monsoon, has called for decisive policy action keeping in mind long-term interests of the country. The finance minister has done this by maintaining the target for fiscal deficit at a realistic 4.5 per cent, with indicative milestones at 3.6 per cent and 3 per cent by fiscal 2015/16 and 2016/17, respectively. This needs to be achieved through increased resources mobilisation as well as containing non-plan expenditure.
The increase in personal IT exemption limit, housing loan interest deduction and investment limit under u/s 80C, while helping in savings and capital formation, will also provide some relief to the middle class hit by inflation. The commitment to a stable and predictable tax regime and review of DTC are positive and welcome moves. However, the continuation of retrospective tax regime is a dampener. I am also surprised that the finance minister has not touched upon the disinvestment proposal for PSUs in his speech.