The finance minister has done it once again. Pranab Mukherjee has scored a perfect hundred to go along with Sachin Tendulkar’s much-awaited feat.
Mukherjee has engineered an absolutely new enabling environment for corporate India. Fiscal consolidation, infrastructure creation, e-governance, increased access to external commercial borrowings (ECB), and additional weighted deduction on R&D and skill development with a stable rate will create a very nurturing environment.
The greatest signal came before the budget when PF rate was reduced. This creates the basis for a rate reduction across the board.
Higher allocation for infrastructure and rural oriented scheme in the Budget should have a positive cascading effect on the economy.
For the common man, on one hand if personal income tax benefits have bought some cheers, the increase in service tax has forced them to review household budgets. For the corporate sector, Mukherjee has kept the tax rates unchanged; he has assured cheaper access to funds for expansion, even as he tinkered with the excise rates and customs duties for specific items.
The move to bring about a broad-based consensus in respect of decision to allow FDI in multi-brand retail up to 51% will certainly boost overseas investor confidence.
This budget will stimulate growth in the economy though at a fractured pace. The disappointing aspect is that the finance minister has not specified a clear timeline for the implementation of GST . Mukherjee has adopted a policy of fiscal revenue consolidation through taxation and disinvestment though it does not meet the desired standards. Accelerated growth may still be elusive.