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A Private Domestic Investment Will Bring Industrial Growth Next Year

A Private Domestic Investment Will Bring Industrial Growth Next Year
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The budget will get the economy back in action after the stress caused by liquidity shortage. What is important it will be the beginning of a new phase of balanced and accelerated growth. The emphasis on rural development and infrastructure including housing was imperative to bring about all round development.

Investment in agriculture and rural development will be up by 24 per cent to Rs.1.9 lakh crore. This will accelerate development and improve rural incomes. The other major sector which has received the attention of the Finance Minister is infrastructure including roads, airports, telecommunications, etc.  A provision of Rs. 3.9 lakh crore has been made in the budget. This investment will make up the deficiency in the development process.  The two together will also generate employment which In the past two years was on a decline, particularly in industry and construction.

The proposed investment will generate demand for a variety of producer and consumer goods. Further, the reduction in tax liability and consequent increase in disposable income of middle class will supplement demand and support growth. Demand is the key to industrial growth.

Foreign direct and portfolio investment for which doing business has been considerably eased, with the total opening of the automatic route, will increase in spite of adverse foreign investment climate. A private domestic investment which had slowed down in the last 2 years will regain momentum and bring a better balance in the economy with industrial growth and exports picking up in the next year, supplemented by agriculture.

The budget will not, however, disturb fiscal consolidation. The budget deficit will be restricted to 3.2% of GDP. Even so government debt will not expand correspondingly and interest rate will not harden. Inflation will not be activated since agricultural production will increase at more than 4 per cent.

Overall, an outstanding Budget, which has all the ingredients to take the Indian economy to a new height.

 

 

 
Edition: May 2017

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