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Modi sarkar's second spell continues with reforms: Sunil Bharti Mittal

The budget sets the right goals in infrastructure and housing, to spur the economy and create more jobs.

ET CONTRIBUTORS|
Jul 05, 2019, 11.35 PM IST
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Budget 2019 may seem a bit of a dampener for the middleclasses, as it come with no changes in income-tax slabs and a rise in excise duty on petro products. But this was clearly on expected lines, as Sitharaman had little room to manoeuvre.
Driving inclusion, infusing new momentum into the economy and a clear commitment to maintain long-term fiscal balance appears to be the overriding considerations for the first budget of the second Narendra Modi government. It also spells out the priorities and direction that the government wishes to follow over the next few years.

Finance minister Nirmala Sitharaman, while reiterating GoI’s target of making India a $5 trillion economy by 2024, quite rightly made a strong pitch for investment in the areas of infrastructure and housing, which will spur economic activities and employment.

Like earlier budgets, rural India occupied an important place this year. A target of 100% piped water to all households by 2024 is likely to be as big an initiative as Swachh Bharat. The stress on affordable housing can be an important trigger to resurrect growth, besides helping India reach the goal of ‘housing for all’.

Spurring manufacturing is high on GoI’s agenda, with proposals like tax concessions for foreign investors to set up mega manufacturing plants. The intent to make India a hub for electric vehicle (EV) manufacturing can prove to be decisive in the years to come.

The budget may seem a bit of a dampener for the middle-classes, as it come with no changes in income-tax slabs and a rise in excise duty on petro products. But this was clearly on expected lines, as Sitharaman had little room to manoeuvre with her tax proposals in a tight fiscal situation.

The ultra-rich may be a tad disappointed with the additional surcharge on income groups over Rs 2 crore and Rs 5 crore. However, this is in line with global trends. Some of the tax administration measures, like interchangeability of PAN and Aadhaar, faceless e-assessment and legacy dispute-resolution mechanism for GST litigation can prove to be extremely beneficial both in terms of taxpayer convenience and additional tax mobilisation.

Increasing the threshold for the applicability of lower corporate tax rate of 25% to Rs 400 crore from Rs 250 crore will benefit the MSME sector greatly. The large corporates may have to wait to be extended this much-needed provision. The telecom sector would have appreciated some relief in view of its current struggle, which one hopes will be taken up outside the budget. GoI’s commitment to focus on spreading digital literacy, and connecting every panchayat under the BharatNet project, will aid the prime minister’s digital vision.

Despite the obvious challenges facing her, the FM remains committed to the broader reforms agenda set out by the Modi government during its first term. By keeping the disinvestment target at above Rs 1 lakh crore, she has clearly spelt out GoI’s renewed intent. The Rs 70,000 crore recapitalisation package for PSBs, and the sops for the NBFC sector, will not only bring back much-needed liquidity in the economy but will also particularly help the latter to resurrect itself. Sitharaman has set out a perfect roadmap, in line with Prime Minister Modi’s agenda for this term.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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