From capex outlay to tax slab rejig, seven big wins from the Budget

The Budget is a growth oriented one and the Finance Minister has checked all the boxes – from consumption to capex to spending to middle class to industry. It’s a capex-heavy Budget, with an announced 33 per cent increase in capex, which will boost infrastructure, logistics and the transportation business.

The government’s focus on ease of doing business and the expanded corpus for the credit guarantee scheme will mean MSMEs have a lot to gain from this Budget. Agriculture and rural development have been given detailed attention, which should boost the rural economy and consumption. The income tax benefits announced will boost the purchasing power for middle-class consumers. I believe the announcements made will trigger a pickup in credit offtake for small enterprises, the consumption-driven two-wheeler business and lending to transportation.

My seven 'Saptarishi' big wins from the Budget are:

1. Capex outlay being 3.3 per cent of GDP represents a government that is focused on growth and is willing to go that extra mile while being fiscally prudent. The massive Railway Budget and 100 transportation infrastructure projects implementation will boost the entire transportation ecosystem.

2. Enhanced ease of doing business by decriminalising multiple legal provisions and reducing the compliance requirements will mean smoother and quicker operations for small enterprises, which often struggle with compliance and legal hurdles.

3. Tax slab rejig will put more money in the hands of the middle class, leading to higher consumption.

4. The enhanced credit guarantee scheme with an infusion of Rs 9,000 crore to the corpus will lead to lower cost of funds for MSMEs and aid the sector, which is the backbone of the economy.

5. The enhanced outlay for the PM Awas Yojana by 66 per cent to Rs 79,000 crore is great news for affordable housing. The Rs 10,000 crore Urban Infra Development Fund will be used for transforming urban planning and making cities more sustainable and will boost housing and housing finance.

6. Higher credit to agriculture through interest subventions and collateral-free loans and rural infra schemes and higher agriculture spending will give the rural economy a much needed impetus.

7. Focus on women and senior citizens through enhanced deposit schemes and specially designed saving schemes for women and girl children will encourage savings and lead to empowerment.

Ahead of the elections, the Finance Minister has delivered a prudent Budget while targeting growth, and I believe the announcements made will have a huge multiplier effect across the economy. 

Umesh Revankar

 

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The writer is Executive Vice-Chairman, Shriram Finance