The finance minister has set a ground for repairing the economy, offering a mix of both short- and long-term measures to boost the confidence of all stakeholders.
The budget has set a clear direction to end tax adventurism. Arun Jaitley’s statement that the government will not ordinarily bring about any change retrospectively, which creates a fresh liability mirroring Ficci’s suggestion that was made in this regard.
Advance ruling will now be made available to resident taxpayers in respect of their income tax liability above a defined threshold.
Jaitley has also indicated a review of Direct Taxes Code in present form. With these measures, the budget offers a consistent tax environment and promises significant reduction in tax-related distortions. This should restore investor confidence and accelerate investments’ pace.
The budget announcements reflect a clear shift from consumptive to productive expenditure. Setting up of the Expenditure Management Commission to review operational efficiencies of government expenditure is a welcome step. Ficci has for long advocated the need to rationalise subsidies and prune down social sector schemes by adopting an outcome-outlay approach.
By raising the personal tax exemption limit, investment limits under Sec 80C and deduction limit on interest on housing loan, the budget brings the much needed relief to the taxpayers.
We also see steps such as introduction of soil health cards, setting up of agri-tech infrastructure fund and launch of a technology driven second green revolution including ‘protein revolution’, all of which can go a long way in providing a permanent solution to the food security issue.
Banks have also been provided sufficient space to raise long-term funds for lending to the infrastructure sector. Setting up of new airports, ports, industrial corridors and an institution to support mainstreaming of PPPs would facilitate all-round economic development in the long run.
The government has made an impressive beginning with this budget and the optimism needs to be carried forward through actual implementation of plans.
We look forward to implementation as per the time-bound schedules promised by the finance minister.
(Sidharth Birla is President, FICCI)