It is a pragmatic Budget which cleverly balances the massive spending envisaged in the infrastructure space. It has also addressed key issues like reviving the rural economy and the urban consumer in the country. It has also managed to find the resources without burdening the common man or the middle class with additional taxes.
The Budget has proposed opening of FDI in key areas such as media, aviation, insurance, and single brand retail to attract foreign portfolio investments (FPIs) into the country. The idea is to make India an investor-friendly destination.
Another key proposal of the Budget is to extend the concessional corporate tax of 25 per cent for companies with turnover of up to Rs 400 crore from the earlier threshold of Rs 250 crore. The move will bring almost the entire SME sector within the purview, as they will be required to pay just 25 per cent tax.
The divestment target of Rs 1.05 lakh crore as well as Rs 70,000 crore bank recapitalisation for the public sector banks will also ensure period infusion of funds. Public sector banks will get some amount of growth capital as a result of that.
The Budget has not only addressed the short-term challenges which resulted from the the fallouts of the IL&FS scam and the NBFC crisis, it also addressed a lot of long-term issues. The strong push to the infrastructure and affordable housing space will give a lot of fillip to the cement sector of the country.
(The writer is Head of Research at LKP Securities. The views expressed are personal)