Budget holds promise The Budget 2014-15 was presented last week and it is encouraging to see that several issues of great economic importance have been set as priorities by the government. Fiscal prudence, infrastructure development, better investment environment, manufacturing and exports growth - all these are need of the hour and the Budget addresses these issues. No doubt, for some the Budget falls short of expectations, but considering the current economic challenges and constraints, most of the proposals seem realistic and robust. The infrastructure sector remained neglected for a long period of time and it is a great relief to see that this time the sector got an uplift in the Budget. Measures like raise in Rural Infrastructure Development Fund by an additional Rs 5,000 crore, allotment of Rs 500 crore for Deendayal Upadhayaya Gram Jyoti Yojana, Rs 14,389 crore for Pradhan Mantri Gram Sadak Yojana, Rs 2250 crore for border infrastructure and Rs 500 crore for scientific warehousing, etc. will certainly help reviving the ailing infrastructure of the country. The Budget has also laid down a road map for creating a better environment for investors. Besides raise in FDI limits in insurance and defence manufacturing, the proposals to introduce uniform withholding tax for external commercial borrowings, expansion of tax holiday to the power sector, permission of tax pass-through for real estate investment trusts and infrastructure trusts, etc are some welcome proposals that are likely to contribute to the cause of creating an enabling investment environment. The micro, small and medium enterprise (MSME) sector will also gain from the Budget. The proposals for introduction of an easy exit policy for small businesses, redefinition of the sector, establishment of a Rs 10,000 crore fund to attract private capital, allotment of Rs 100 crore for rural start-up entrepreneurship and Rs 200 crore for scheduled caste entrepreneurs, setting up of six textile mega clusters, etc carry good news for the sector, but needless to say, they are not enough. I hope the government will take some concrete steps in the coming days to help MSMEs get rid of the lingering challenges like lack of finance, high interest rates, red tape and poor implementation of the MSME schemes. As far exports in concerned, the emphasis on more involvement of the states is very positive. I raised this issue earlier and always believe that without active participation of all the states we can never explore our true export potential. In addition, the proposals for extension of 24X7 customs clearance facility to 13 new ports, single customs window for EXIM trade are encouraging, but again they are not enough. The sector needs much more support in terms of finance availability, market access and marketing assistance. I invite your feedback.
Posted on: Tue, 15 Jul 2014 08:09:36 +0000
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