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This Budget is a great effort by the government towards consolidation. On the one hand, they have combined railways and the general budget, and on the other, GST will consolidate indirect tax structure. In my view, the Budget puts forward the key objectives of the government, that is, accelerating growth, infrastructure, digital economy, agriculture and better governance.
Fiscal prudence has been maintained with the target fiscal deficit of 3.2 per cent of GDP for FY-18, moving towards 3 per cent next year. The total expenditure for FY-18 is pegged at ₹21.47 trillion and capital expenditure allocation is up 25.4 per cent.
The fiscal deficit is capped at 3.2 per cent of GDP for FY17-18 and net market borrowing is capped at ₹3.48 trillion against ₹4.25 trillion for FY 16-17. The CPI inflation is likely to remain in the 2-6 per cent% range.
Specific focus has been imparted to several priority areas, including benefits to rural regions through development, five lakh farm ponds to be taken up under MGNREGA in 2017-18, ₹10 lakh crore as credit to farmers with 60 days interest waiver and a dedicated fund to be set up by Nabard with a corpus of ₹5,000 crore to assure better market prices to farmers for their produce.
A focus on harnessing the potential of positive Indian demographics through the Skill India programme is likely to increase employment opportunities.
A ban on cash transactions over ₹3 lakh will promote digitalisation and bring more transparency in the economy.
Some of the concerns of domestic transfer pricing being addressed is a welcome step. There is an intent to promote SMEs by reducing tax rates, though corporates were expecting a tax rate cut all across. A broader tax base and improved compliance will help augment tax revenues.
Tax rate reduction from 10 per cent to 5 per cent for assessees earning income between ₹2.5 lakh and 5 lakh could help boost demand.
Overall the Budget is good with a focus on revival of economic growth through fiscal discipline, focus on job creation and skill development.
However, expectations of a reduction in corporate tax rates was not met.
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