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This was a historic Budget in which the date was one month earlier than normal, and the Railway Budget was for the first time integrated with the Union Budget. Overall the Budget was appropriate and growth-oriented. There was a tremendous emphasis on rural and agricultural growth. Several valuable initiatives were announced. We will get a better idea when the details are elaborated.
One of the very good developments on agriculture is that a new legislation on contract farming is to be introduced. It will add tremendously to agricultural productivity. Another good development in this regard was the announcement that by 2018, all of India’s villages will be electrified. We believe that these developments in the rural sector will strongly benefit our businesses, particularly Godrej Consumer Products and Godrej Agrovet.
This Budget also had a strong emphasis on real estate development, especially affordable housing. Infrastructure status for affordable housing is very welcome. Real estate is the largest single business in India and strong encouragement will add strongly to GDP growth. We expect Godrej Properties will benefit considerably.
Emphasis on the development of women and children is also welcome. Also welcome is the emphasis on youth, both from an education and skilling point of view. Welcome changes in political funding were also announced.
This should help in reducing black money involvement in politics.
The Budget speech confirms the very strong macro-economic situation India is in. It also confirms that GST is to be implemented from July 2017. Several expected negatives that were talked about prior to the Budget were not in the final speech. There were also many positive clarifications on past Finance Ministry announcements. The extension of MAT credit to 15 years is a good development. However, the increase in income tax rates for income over ₹50 lakh is a negative development.
Several provisions to increase the level of digitisation in the Indian economy and reduction in the use of cash in the economy are also welcome.
The writer is Chairman, Godrej Group
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