Finance Minister Arun Jaitley has presented a balanced and developmental budget. His focus on infrastructure development, mainly on roads, industrial corridors, ports, power, urban renewal and particularly inland waterways, will make Indian businesses more competent.
The idea is to make logistics more efficient and reduce its cost, which will have spin-off benefits on the manufacturing sector.
A further boost was provided by raising foreign direct investment (FDI) limits in the defence and insurance sectors and to encourage development of smart cities.
Besides, capital requirements for FDI in real estate have been reduced.
The Finance Minister has also opened opportunities in long-term funding for infrastructure through infrastructure investment trusts and real estate investment trusts, and allowed flexibility to banks to raise long-term funds to lend for infrastructure projects.
Several tax rationalisation and simplification measures have been proposed as well and the desire to introduce GST quickly is welcome.
Boost to manufacturingTax relief to individual taxpayers will put more money in the hands of the people for higher discretionary spending, which will give a boost to the manufacturing sector.
The Budget’s fund allocations to social infrastructure are more specific to programmes, which are the first step to effective implementation.
The Budget also stressed that works under the MGNREGA to be more productive, asset creating and substantially linked to agricultural activities.
However, there are some concerns regarding increase in the tax burden on companies for distribution of dividends.
The writer is Director, JK Organisation and Vice-Chairman & MD, JK Paper