The Budget offers a vision and direction on the financial and tax aspects. The announcements made for developing a social security system linked to savings, coupled with emphasis on treating rural and urban India as a whole reflect the mood for a unified approach.

One key aspect was the recognition of India being a country of entrepreneurs and most importantly the fact that Indian business largely comprised small businesses across manufacturing, trading and services.

Mudra Bank and provision of funding allocation through the financial system and India Post starting a payment bank venture are all directionally important.

The need to complete the 100,000 km road projects and initiating another 100,000 km of road projects should give a directional target for the government as also private enterprise.

Corporatisation of major ports and utilisation of their excess land banks in city centric locations is the first step in a complex journey. The most promising statement was, however, the innovative idea of the government setting up a fund. The fund with its general partner commitment from the government of ₹20,000 crore can access probably another ₹180,000 crore from global investors and additional debt resources to provide access to equity and debt capital for infrastructure and real estate.

Some gaps though

I was a bit disappointed with the half job done for business trusts. The budget has proposed a capital gains treatment for sponsors in line with an IPO of a company, but the pass-through status of the business trust in relation to assets held through special purpose vehicle’s remains unaddressed.

The silver lining was the directional targets on fiscal deficit being reined in at 3 per cent over the next few years as also the cut in corporate tax rates, but nothing for the average Indian, other than a promise that when the fiscal situation permits, they will be the first beneficiaries.

The writer is Tax Partner and Leader for real estate &infrastructure, EY

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