Comments
The budget in India always generates immense commentary. A budget in today’s India will never be unanimously appreciated or unanimously derided. The challenge to the finance minister is real and there is no silver bullet.
India needs economic growth coupled with creation of a million jobs every month, India needs to contain Inflation for the common man or woman, India needs to contain its fiscal deficit below 4.1 per cent and India has to be attractive to Investors by easing the rules and also being consistent with policy.
No Budget can score high on all the outcomes that every stakeholder expects. In that context, this Budget has a balance to it and it is in the first chapter of a series of measures over the next few years. I see this as a ‘BHIMA’ budget, each alphabet representing something of note in the budget.
The first is Black Money. The government made this a clear election promise and action was on the cards. The proposed actions on black money in this Budget are a clear message on how this country will deal with this parallel economy. We have argued that the parallel economy is larger than the real one and the steps announced in the Budget like imprisonment is possibly the toughest governance measure that we have seen yet. PAN number for all transactions above a lakh of rupees is also a good move. The second is to do with impacting human potential. The finance minister has rightly put ₹68,968 crore into education, ₹33,152 crore into health, ₹22,407 crore into housing, ₹10,351 crore into women and child development and ₹79,526 crore into rural development.
These are significant investments and continue to build on previous investments. A lot of these investments benefit the disadvantaged portions of society and that’s something all of society owes them.
Building blocks The third is ‘Infrastructure’. If there is one theme everyone agrees on, it is the need for higher investment in infrastructure both physical and digital to make India efficient and also attractive. As of today, we need more than $400 billion of infrastructure investment to make India competitive in the next decade. Though the money allocated here may not be enough but it is a great start. The challenge is to make the PPP model work in infrastructure.
The next is the ‘Middle Class’. Some people have labelled the current government as a pro-rich government, hence it was important for the Budget to signal clear actions to show balance between driving economic growth and improving the lives of the poor and middle class. The deductions available to the middle class that total to a little more than ₹4 lakh are a good step into encouraging the middle class to save more. Among other initiatives, insurance for the poor at ₹12 per year is also a welcome step.
The last is about making India attractive to all investors.
The proposed reduction in corporate tax from 30 per cent to 25 per cent over four years is truly pragmatic because the real level of collection is 23 per cent today. This helps counter the notion that India is a high tax nation.
There are a number of benefits leading to ‘Make in India’. The whole technical services charges reductions etc. are positive moves. This concept of making India attractive to investors will be an ongoing roadmap and the country must take one extra step with every budget if the promise of putting India into the top 50 countries in terms of ease of doing business has to materialise.
The definitive statement on GST is welcome. The GST discussions started in 2000, and after 15 years, it finally looks to be ready to roll. GST will change the way India manufactures, supplies and distributes goods and services. GST will be an enabler to a scale India and that will benefit everyone in the chain in all goods and services. The top five positives trending on social media with this budget are: Strengthening infrastructure, make in India via skill building, black money, GST and IIT/IIMs. This is a pragmatic budget that does not play to the gallery. The finance minister has shown BHIMA such as strength and prudent financial management in a year which has given us a big break via oil prices.
The writer is Chairman & CEO, PepsiCo
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.