Budget to bring back economic growth momentum, says Ficci president

The Union Budget 2020-21 presented by Finance Minister Nirmala Sitharaman is pragmatic and sends out positive signals for bringing back growth momentum in the economy. Reviving rural economy is crucial to uplift growth, and the 16-point action aid provided in the Budget to agriculture, allied sector and rural economy, with an allocation of Rs 2.83 trillion, should help raise rural income and drive consumption.

Consumption growth is also expected to be driven by the new personal income-tax regime structure being offered to individuals who opt out of various exemptions. This lower tax regime is expected to leave more income in the hands of consumers, thus, giving the much-needed push to demand.

Together with the consumption boost, the Budget also lays down proposals to step up investments. The Rs 100-trillion infrastructure investment plan that was announced last year will get a significant push, with tax exemption being provided to infrastructure investments by sovereign wealth funds.

We are happy to note that government will set up a portal-based Investment Clearance Cell for end‐to-end facilitation and support, including pre‐investment advisory, information related to land banks, and facilitate clearances at the Centre and state level.

Micro, small and medium enterprises (MSMEs) are also set to benefit from the enhanced ease of doing business, especially with the raising of the threshold limit for audit to Rs 5 crore. The Budget also provided financing relief to MSMEs by enabling non-banking financial companies to extend invoice financing, introducing a subordinate debt scheme.

The Budget offers huge relief to exporters with the introduction of a new scheme for reversion of duties and taxes on exported products. Exporters can also take the benefit of the proposed Nirvik ((Niryat Rin Vikas Yojana) scheme, which provides for higher insurance coverage, reduction in premium, and simplified procedure for claim settlements.

We also look forward to the details of the proposed National Logistics Policy, as this is crucial for lowering the cost of doing business in India.

On the whole, we see a focused approach in strengthening entrepreneurship and manufacturing growth, which will, in turn, enable creation of greater jobs in the economy.