Budget 2017 is quite unique in many ways especially being presented earlier than before and coming before the likely implementation of the biggest tax reform in India which is GST and it is the first budget after the massive initiative undertaken by the government to de-legalize high-value notes undertaken by the government.
At a broader level, this year’s budget is expected to deliver a fiscal stimulus to boost consumption, investment and growth and simultaneously enhance government revenue through the widening of the tax base. Some of the measures have already been announced by the government to boost consumer sentiment especially the ones most affected by the note ban such as interest relief for farm loans for 60 days and guaranteed 8 percent interest for senior citizens on bank deposits up to 7.5lakh for 10 years. We welcome the approach announced by the government to focus more on the rural areas, infrastructure and poverty alleviation activities. The highest ever allocation under MNREGA to 48,000 crores is a significant step in this direction.
With a normal monsoon, total rural, agricultural and allied sector expenditure has been increased by 24% which will provide a boost to the rural economy along with a targeted agricultural credit of Rs 10 lakh crores which is a step in the right direction.
We also welcome the announcement by the government to create one crore houses for the poor by 2019 as well as providing affordable housing infrastructure status which will help all the companies involved to avail all the benefits being enjoyed by infrastructure companies. Affordable housing is a priority for this government and it was expected to get infrastructure status. With infrastructure status, developers can access foreign funds at a cheaper cost by way of debt and it will be a priority lending for banks as well.
This should result in a progress in the sector. One of the positive steps announced by the government to tax rate for the SMEs which have a turnover of less than Rs 50cr to 25% from the current 30% which will help the small scale entrepreneurs and create a conducive environment for the growth and the development of the SME sector.
One of the key highlights of the budget is the significant increase in the allocation of budget in the infrastructure sector which is going through a significant transformation and requires considerable support. We also welcome the initiative by the government to introduce the aadhar based payment system in keeping with its stated objective to usher in a digital India in terms of all the financial transactions across the country.