India's trade bodies The Associated Chambers of Commerce & Industry of India (Assocham) and Federation of Indian Chamber of Commerce and Industry (Ficci) hail the budget presented by Arun Jaitley today, saying that the finance minister's 'nine pillars' of growth will transform India.
Commenting on the Budget, Harshavardhan Neotia, president, Federation of Indian Chamber of Commerce and Industry (Ficci) said overall the budget proposals are in line with the development priorities of the nation.
The finance minister has made a strong attempt to pump prime the rural economy and the infrastructure sector. This would yield dividends and we foresee a multiplier effect in the form of demand generation and employment creation over time. The state of the agriculture sector on account of two consecutive years of monsoon failure was precarious and it deserved the attention that was needed, Neotia said.
''Additionally, we see a lot of emphasis on affordable housing segment which will also result
in forward and backward linkages and thus propel growth. Sticking to the fiscal framework is
another major plus and should offer comfort to the international community. Attempts
towards tax simplification and improving the tax litigation framework are also
noteworthy'', he added.
''By committing itself to doubling farmer's income in five years, the government has ensured that all steps will be taken that would fortify the viability of the agriculture sector in the coming years. Creation of a long term irrigation fund, a further push to the Soil Health Card Scheme, incentivising production of pulses, implementation of a Unified Agriculture Marketing Scheme and bringing on board more states to reform the APMC Act are encouraging initiatives.
Ficci has been highlighting the importance of these moves for long and is happy to note that these will now be taken up in right earnest by the Government'', said Neotia.
In the rural sector, we see the government enhancing allocation under MGNREGS and linking it with asset creation to address the issues of rural and farm distress. Additionally, under the
Swacch Bharat Mission, the idea to reward villages that give adequate focus on sanitation.
''There is a clear link between a healthy society and higher GDP growth as outlined in the
Economic Survey and we are happy to see this thought process being carried in the budget'', Neotia said adding that the Digital Literacy Mission Scheme for rural India and the revamping of the National Land Record Modernisation Program will also help strengthen the rural economy.
Taking forward the agenda to extend the social security net, finance minister has announced
the introduction of new health protection scheme with additional coverage for senior citizens
particularly from poor and economically weaker families.
The setting up of a higher education
financing agency for supporting improvements in infrastructure in educational institutions and
leveraging the strength of massive open online courses for extending entrepreneurship
education and training would help in having a better learning environment for students.
''Another key suggestion from the Economic Survey that mirrors in the budget is the focus on
creating new jobs in the formal sector. Towards this the Finance Minister has announced that
contribution towards Employee Pension Scheme for the first three years will be supported by
the government. Ficci in its pre-budget consultation with the Finance Minister had suggested
that contribution to PF and ESI for the first three years particularly for start-ups and SMEs
should be contributed by the government and we are happy that a start has been made in
this direction'', said Neotia.
Assocham president Sunil Kanoria said focus on rural economy with a commitment to double the farmers' income by 2022, betting quite high on rail and road infrastructure and yet sticking to the financial discipline by retaining the fiscal deficit targets for 2016-17 are the most important takeaways from the Union Budget 2016-17.
''The government has rightly realised that a sustainable and equitable growth model cannot be built as long as the rural economy is in distress,'' said Kanoria.
''With successive monsoon failure, the farm sector was in distress and the finance minister with a clear vision of the prime minister Narendra Modi has tilted the balance in favour of the agriculture sector, this would certainly yield dividends for the entire economy and provide a solid foundation for a robust economy,'' he added.
There has also been a realization that in the absence of demand for the industrial products all over the world with the businesses battling under- utilization of capacity, the growth has to be led by the under-developed infrastructure, he said.
''A huge commitment of Rs2.18 lakh crore on the rail and road infrastructure will not only kick start the economic growth but would also result in having a multiplier effect on India's economy,'' said Kanoria.
He said re-opening the window for tax compliance is a clever and smart strategy to bring unaccounted money into the mainstream. ''We hope several individuals and entities would be willing to join the mainstream by paying an overall 45 per cent tax.''
Yet another positive feature of the Budget is a slew of measures to reform the tax regime and dispute resolution mechanisms. ''However, the government must ensure there is a good amount of coordination.''
Kanoria also said that rationalisation of tax deducted at source (TDS) should help small taxpayers, besides, relaxation of presumptive tax rules for SMEs and professionals would make life easier for them.
''Realising well the limitations brought in by slow demand and global slowdown, the Budget has rightly put emphasis on creation of employment through Start Up India and Skill Development; however, rationalisation of and simplification of tax rates would have benefitted the overall ease of doing business, especially keeping in mind that GST implementation seems to have been pushed ahead,'' said the ASSOCHAM chief.