Finance Minister Arun Jaitley has reconfirmed the observations of the Economic Survey that damage caused by demonetisation to GDP growth has been minimal. And in this context, Budget 2017 looks to be “forward looking and positive”, Rakesh Shah, President, Bharat Chamber of Commerce observed.

“Holistic approach on agriculture with enlarging emphasis on irrigation, soil management and integration of farmers with agro-processing, including an enactment for contract farming, is expected to give a fillip to the farm sector and the food processing industry and enhance food security,” he pointed out.

According to Shah, infra status for affordable housing, modification of capital gains tax, increased rural spending in terms of social infrastructure, are expected to give a fillip to the real estate, cement and steel sectors.

“On the other hand, it appears that other than incentives for electronics manufacture, there is no proposal in the Budget to boost production in specific sectors of industry,” he added.

Taxation

“The overall approach on taxation, including the proposals for political funding and reduction of individual tax rates, is laudable,” Shah said, adding that moderation of tax rates for MSMEs will encourage greater tax compliance.

However, opportunities for moderation of taxes on manufacture and providing overdue competitive strength to manufacturers and exporters appear to have been missed.

The emphasis on infrastructure investment is also a welcome move, especially on account of a falling inducement to invest by the private sector and tendencies of low aggregate demand in the Indian economy post demonetisation.

“The decision to make maximum investment in the domestic transport sector infrastructure is laudable on account of the Governments aspiration to enhance domestic business by exploiting the vibrant domestic markets of our country. At a time when producers all over the world tend to capture the Indian market, the move to connect Indian producers to its vibrant market is also welcome,” Shah pointed out.

Negatives

However, the Budget has not clearly mentioned as to what extent the Railways will support the growth of the economy and the emerging opportunities for the private sector in its developmental programmes.

Programmes and proposals for expansion of economic activities in healthcare, higher education and job creation needed greater elaboration, Shah said.

Related Topics
comment COMMENT NOW