R Shankar Raman

CFO, L&T

The government’s maiden statement of intent for FY 2015 is realistic, recognises the all-round constraints and severely conflicting objectives of growth, fiscal rectitude and inflation. With a clear focus on the need to revert to a 7-8 per cent growth trajectory, the Budget has begun with the need to stabilise the macro-economic fundamentals on sound economic logic rather than window-dressing measures.

Admitting the tough economic backdrop of sub-par growth of below 5 per cent over the last 2 fiscal with unsustainable levels of double-digit inflation, the Finance Minister has accepted the challenge of achieving the difficult target of 4.1 per cent fiscal deficit. High on intent, the Budget has attempted a medley of measures aimed at reviving savings/investment on one hand and consumption on the other.

While continuously emphasising the need for industrial revival, the Finance Minister stressed on the need for inclusive development.

He has budgeted for a growth of 17 per cent in tax revenues, 10 per centgrowth in non-tax revenues and 6 per cent in market borrowings. Disinvestment proceeds have perhaps been budgeted lower than what is possible at Rs. 63,425 crore. The Budget has attempted to find sources of finance for important economic stake holders such as PSUs and banks from outside the Budget funding.

The Budget has categorically prioritised infrastructure development, highlighting the need to address the anomalies in the existing PPP framework. Introducing measures such as REITs and infra investment trusts which have a pass through mechanism of taxation would encourage investments in these sectors. Another significant step is that banks will be allowed to raise long-term finance for funding infrastructure projects without the binding regulations of SLR and CRR.