Budget banks on consumption

Other sectors like healthcare, hospitality, textiles etc are also set to gain from this budget on account of reduction in duties, writes Nilesh shah.

The budget was a pro-consumption driven budget with the focus on inclusive growth. The speech begun with concerns on inflation, which was further reinforced by the FM stating that it would continue to strictly monitor capital inflows. The primary focus was on three major sectors ie Agriculture, Education and Healthcare.

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Marginal and small farmers received maximum advantage through complete waiver of loans while others would receive the benefit of one time settlement. However this could result into a total liability of around Rs 60,000 Crores amounting to 4 per cent of bank loans, the pressures of which will be faced by the PSU banks.

Infrastructure growth and development also found an important place in the budget further endorsed through the outlay of Rs 31,280 crore for the Bharat Nirmaan programme and of around Rs 14,000 crore as part of the Rural Infrastructure development programme.

Other sectors like healthcare, hospitality, textiles etc are also set to gain from this budget on account of reduction in duties.

Further the increase in the tax exemption slab for salaried employees from Rs 1.1 lakh to Rs 1.5 lakh (tax slab for women increased to Rs 1.8 lakh and for senior citizens to Rs 2.25 lakh) is a welcome move, as it will provide increased disposable income thus driving consumption and increasing saving and investments. For the industry it would amount to increased inflows.

(Nilesh shah is the Deputy Managing Director, ICICI Prudential AMC)