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The key takeaway from the Budget has been fiscal prudence. The Finance Minister has rightly kept the fiscal deficit at 3.2 per cent of GDP in FY18 and, at the same time, focussed on rural spending and infrastructure to achieve a fine balance.
With ample liquidity in the system, interest rates are likely to continue to remain low during the year.
Many feel that the ₹10,000 crore recapitalisation package for public sector banks may not be adequate, but the Finance Minister has promised additional funds, if required. Tax benefit on provisioning for bad debts will also help the banking sector.
The digital initiatives are a logical step post-demonetisation to fight black money and bring the informal sector into the formal economy even as the abolition of the Foreign Investment Promotion Board will go a long way in improving the ease of doing business.
Tax cut for MSMEs with annual turnover of ₹50 crore and emphasis on affordable housing will drive the growth engine.
The Budget has also emphasised on greater tax compliance/collection by bringing more people into the tax net.
Overall, the Budget, while not deviating from the chartered path of fiscal discipline, contains measures to augment the growth momentum.
Chandra Shekhar Ghosh,MDand CEO, Bandhan Bank
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