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Our debt to GDP has averaged 73.66 per cent from 1991 until 2014. How much leeway between debt and economic performance can we expect, given moderating interest rates and inflation but dipping stock prices and growth, assumes relevance. There could well have been a case to accumulate more government debt until interest and inflation rates begin to reverse. The Economic Survey suggested as much. But the bigger challenge is to discover the political will to continue on reforms, yet stay away from generous revenue expenditure. The FM has sagaciously stood by the targeted fiscal deficit, while being no less enthusiastic about garnering funds from diversified sources for growth. Inclusiveness, at some cost to corporate expectations, has not been lost sight of either.
R Narayanan
Ghaziabad, Uttar Pradesh
The Budget has maintained the fiscal deficit targets for the next year at 3.5 per cent, which is good news but on the contrary the minister could have been bolder in announcing asset sales to achieve this target. The funds provided for bank recapitalisation are inadequate. The 10 per cent tax on dividend income of more than ₹10 lakh should be welcomed by all. The markets have over-reacted to the downside because of the increase of STT and no reduction in corporate tax. Much more could have been done to alleviate rural stress because of failed monsoons. The country needs banks to provide credit for investment, growth and jobs; the Centre must solve the banking problems quickly.
CR Arun
The Budget has clearly focussed on rural and agriculture growth. The “9 pillars” listed out by the FM show that the Centre wants to not only improve the health of PSBs, but attract investment and bring infrastructure growth on track as both agriculture and infrastructure form the backbone of our economy. But biggest issue is the funds allocated for bank capitalisation: ₹25,000 crore will not suffice. The Economic Survey had sought almost ₹2,00,000 crore for this. How the government will revive lending by PSBs is a million dollar question. By renewing focus on MGNREGA, it has sent a clear signal to rural voters that they are in focus, given that elections are due in some States. But the Centre needs to ensure that there is no corruption in the implementation of this scheme.
Bal Govind
Noida, Uttar Pradesh
The Budget largely sells some long-term ‘dreams’ to all sections of people. It also talks of some highly ambitious projects pertaining to key sectors such as finance, agriculture and industry. However, one really wonders if it would be prudent and feasible to so accurately ‘anticipate’ the future outcomes of long-term plans and projects. The Budget also takes the middle-class, its traditional votebank, for a ride once again by offering it peanuts at the lowest level but subjecting it to more and more taxes in one form or the other. Who knows, the government of the day may have to eventually ‘face the music’ in the forthcoming Assembly elections.
Kumar Gupt
Panchkula, Haryana
The FM has on the whole presented a populist Budget. The thrust on the rural sector especially the augmentation of the crop insurance scheme is a welcome step. Recapitalisation for the banking sector is ideal. Most PSBs have been languishing with humongous NPAs and this sort of rehabilitation will provide succour.
RK Sridharan
Chennai Rescue mission
A well thought-out plan to recover existing bad loans from wilful defaulters is key to restoring the health of the banking system. An effective bankruptcy law can offer a decent exit route to delinquent promoters. The appointment of Vinod Rai, the former CAG, as the first chairman of the Banks Board Bureau sends a clear message that the government is serious about reforming PSBs. The Bureau should deliberate on the question of reducing the number of PSBs, so that it leads to the creation of a few strong, large banks as there is not much din their product portfolio to justify their separate existence.
Philip Sabu
Thrissur, Kerala
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