This was a real difficult budget to formulate, considering the overall macro-economic scenario, GDP growth curve and changing equations of geo-politics affecting the international trade. The Hon’ble Finance Minister has tried to create a balance of sustainable growth, welfare initiatives and employment generation. Focus of capital expenditure and infrastructure spending is clear signal that the government is determined to put the GDP growth back on the track of 8% or more in couple of years.
This is also important to notice that the global trade vibrancy is tapering down, and hence it is crucial to focus on the domestic front in terms of production. The budgetary emphasis on sectors like Make in India, MSME, technology, defense and agri-infra are initiative in this direction.
Infrastructure & Urban Development has multiple focal points in the infrastructure such as reemphasis on PPP, setting up fund of Rs 1 lakh crore on redevelopment of cities, 120 news airports under UDAN. It is also a very positive thing that the government has decided to give access of relevant data and maps under PM Gati Shakti scheme to the private sector.
The budget also has made noticeable provisions in the income tax slabs for increasing the disposable income in the hands of common people which will in turn strengthen domestic demand and household consumption necessary for ensuring growth.
The MSME sector has rightly been put as second engine of growth as it is a major export contributor. However, export oriented MSMEs could get the support from the government in terms of PLI, technology upgrade, capacity building and tax-benefits. We strongly believe that in the follow up policy announcements, these issues will be addressed by the FM.
The Real Estate sector was expecting rationalization is GST rates of building material and other policy announcements to address the liquidity issues. However, as it remains unaddressed, the Realtors will feel a bit disappointed.
Overall the Budget is in line with the expectations and it should lead to steady revival in GDP growth. A lot will depend on how speedily the large scale flagship programs are rolled out, while keeping the fiscal deficit in check.
