Plan and Policy

Plan & Policy

Budget paves way for MSMEs to be catalysts for growth

It is beyond doubt that the most vibrant and resilient micro, small and medium enterprises (MSME) sector shall act as a catalyst to the growth in the Indian economy. The budget further strengthened the sector by making key structural changes; enabling the ease of doing business; and providing tax benefits.

Structural changes

Caters to all

The budget has tried to cater to all constituencies, however many market participants are looking at the budget from the point of view of long term capital gains tax. We have already seen significant price correction in small and mid-cap stocks in run-up to the budget as most market participants were focussed primarily on long term capital gains tax.  That is a very narrow way to look at impact of budget provisions on the economy and capital markets.

Logistics remains a critical focus area

The Budget 2018-19 has managed to find a balance between public expenditure and fiscal prudence. It has reiterated the focus laid out in the Economic Survey – with focus on agriculture, education and employment in the medium-term.

Fiscal slip is showing

Finance minister Arun Jaitley's struggle with the fiscal deficit is unmitigated as on Thursday he projected a higher fiscal deficit of 3.5 per cent of the GDP for fiscal 2017-18 against the target of 3.2 per cent, on account of GST implementation and deferment of spectrum auction.

Spotlight on rural economy

A ‘path breaking’ budget which gives a much needed impetus to the agriculture sector, the backbone of the Indian economy. Allocations such as Rs 500 crore for Operation Green, a corpus of Rs 10,000 crore for the Fisheries and Aquaculture Infrastructure Development Fund and the Animal Husbandry Infrastructure Fund, Rs 11 lakh crore for institutional credit for farm sector among others would help distressed farmers get necessary funding.

Spotlight on rural economy

A ‘path breaking’ budget which gives a much needed impetus to the agriculture sector, the backbone of the Indian economy. Allocations such as Rs 500 crore for Operation Green, a corpus of Rs 10,000 crore for the Fisheries and Aquaculture Infrastructure Development Fund and the Animal Husbandry Infrastructure Fund, Rs 11 lakh crore for institutional credit for farm sector among others would help distressed farmers get necessary funding.

Relief for labour shortage in textiles and leather sectors

The government hastried to address the shortage of labour in textiles and leather sectors by providing incentives. The government has incr­eased allocation for textiles and the industry wa­nts speedy disbursal of incentives. Reduced corporate tax for companies with less than Rs 250 crore tu­rnover will benefit both textile and leather companies.

Govt promises to purchase solar power from people

Government assurance to set up a mechanism to buy surplus solar power from commoners enthused all but the industry expressed concerns over proposed 70 per cent safeguard duty on solar equipment in the Budget.

“Generation of solar electricity is harvesting of sun by the farmers using their lands. Government of India will take necessary measures and encourage state governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licencees at reasonably remunerative rates,” Finance Minister Arun Jaitley said in his Budget speech.

An inclusive Budget

This is a prudent budget that is directionally on track, with a focused gaze on the social, academic and economic front, in the spirit of inclusive growth. It endeavours to strike a balance between fiscal priorities and growth. 

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