Sharp focus on infrastructure
01 February 2017
Kaushal Sampat, president and managing director, Dun & Bradstreet India
At a time when the Indian economy has been facing headwinds of weak demand (particularly rural), frail private investment and subdued business confidence post demonetisation, the Budget was expected to give a fillip to consumption and investment besides signalling stability, continuity and clarity.
The finance minister has done just that by delivering a fiscally prudent and socially inclusive Budget. Staying away from big-bang measures, the Budget has signalled continuity in economic policy priorities with a strong focus on rural India. Higher allocation to MGNREGA and Pradhan Mantri Gram Sadak Yojana will help boost rural income and in turn will propel consumption in rural-linked sectors such as tractors, two-wheelers and fast moving consumer goods.
There is a sharp focus on infrastructure investments, which if implemented effectively, will have spillover impact on overall growth. Likewise, the impetus given to affordable housing will have a positive effect not only on related sectors such as cement and metal, but is also positive for job creation in the construction sector.
The push given to digital payments and the Budget proposals on cleaning-up political funding reinforces the government's resolve to bring transparency into the system while the SME sector has lots to cheer about with the proposed reduction in tax rate.
For foreign investors, doing business in India has been made easier with the abolition of Foreign Investment Promotion Board (FIPB) while corporate taxpayers have been granted partial relief by extending the period allowed to carry-forward the MAT credit to 15 years. Besides, tax rationalisation and simplification will not only help in correcting inverted duty structure to some extent but also will improve ease of doing business. The Budget is positive and the fiscal deficit target of 3.2% would provide impetus to rating agencies worldwide to enhance India's sovereign rating.''