Budget high on fiscal prudence: Mohandas Pai, Chairman, Manipal Global Education
The budget carries forward its target of fiscal prudence, having a fiscal deficit of 3.2 %. It has reduced its revenue deficit to 1.9%, which is very good. Tax collection this year, is in excess of target by nearly Rs 70,000 crores, which is very good and shows that the budget has been well run.
Budgeted expenditures has been fully met and transfers to State and Union territory is higher. On the financial front, the budget brings good tidings. With GST coming, and with other tax reforms, it is prudent to keep indirect taxes at low level. If one looks at spending pattern, there is focus on the poor, farmers, rural sector and infrastructure, which is good.
In the transport sector with railways and roads, there is an allocation of Rs 2,50,000 crore, while overall Infrastructure has Rs 3,50,000 crore, which is good. Another positive aspect is that Capital expenditure is up by 25% for the year.
There is focus on digitization, which will make sure more of the economy becomes formal. There is a push towards better governance by limiting cash donation to Rs 2,000 to political parties and the special reform of electoral bond to facilitate donation from explained sources. This will reduce black money.
The tax bracket of the 1st slab has reduced from 10% to 5 %, which is good. However, there is a missing middle problem of the professionals in the Rs 5 lakh to Rs 25 lakh bracket, which has not been tackled. Sadly, a surcharge of 10% has been levied on individuals with income between Rs 50 lakh to Rs 1 crore, which is wrong.
With respect to corporate tax, small corporates with revenue not more than Rs 50 crore are seeing a tax reduction to 25%. However, large companies have been left out as the government is saying the big boys can take care of themselves. They have forgotten their promise of reducing the corporate tax from 30% to 25%. There is no special focus on the education sector. There are 60 lakh graduates every year. For rural employment there are tons of schemes, with skill development and rural housing and infrastructure programs in villages.
However, there are no schemes for the educated middle class which is a major failure on part of the budget. Jobs are scarce and will increase unemployment.
Tax terrorism continues as large number of disputes have not been settled. As of March 31, Rs 9,30,000 crore of taxes are in dispute. Ever since the advanced pricing and MAP process has come into being, dispute resolution has not worked at all. This is a major concern for industries.
For startups, few needs have been taken care of in the form of expansion of tax breaks, yet more needs to be done for them. Overall, the budget has focused on growth and development, but tax terrorism is a major issue that needs to be tackled.
No impetus to private sector investment, manufacturing: Kiran Mazumdar Shaw, CMD, Biocon
The Finance Minister has presented a balanced budget and operated with fiscal prudence within his zone of comfort. The upsides provided by the impending GST implementation as well as imminent remonetisation perhaps explain this cautious approach. There were certainly no negative surprises which has pleased the markets. Positive takeaways were the push for boosting the agrarian economy with a Rs 10L crore Agri-credit and a 24% increased allocation for rural infrastructure. The abolition of the FIPB is a good step and shows India’s openness to FDI at a time when protectionism is increasing around the world.
The FM’s initiatives to clean up political funding, including the innovative step of introducing electoral bonds is welcome. The proposal to reduce Corporate Tax to 25% for Start-Ups and MSMEs with revenues upto Rs 50 crore are positive signals. Several schemes directed at youth for education & skill development as well programs aimed at improving women’s health are good moves. Where I thought the Budget fell short was in providing enough impetus for private sector investment, manufacturing and exports, which are urgently needed to propel the Indian economy to an accelerated growth path. The global trends point towards lowering Corporate Taxes, and given that the FM has promised to reduce corporate tax rates to 25% in 3 years, I believe that this was a missed opportunity to align India with the global trend. Overall, I will rate the Budget 7/10.
A responsible budget, but urban infrastructure ignored: R.K. Misra, Urban expert
Given the challenges of a slow economy, which increases the need to improve investment and create jobs, I would say this budget is a responsible one.
Huge allocations have been made for infrastructure development, rural schemes and industries, including textile and leather, which will hopefully create more jobs. Reducing the percentage of tax from the existing 10% to five percent will encourage the middle and lower classes to pay their taxes, also a good thing!
Also, tax filing procedures within Rs 5 lakhs have been made easy and first-time tax payers have been assured that they will not be subject to scrutiny or harassment.
The effect demonetisation has had on the economy has been pegged between 0.025 – 0.5 percent. However, the government has, by way of reducing tax slabs, given people more purchasing power, perhaps with the aim of improving consumption.
It fell short, however, in terms of urban initiatives. I had hope to see more spending on urban initiatives and had suggested building of eight mega cities. Improving urban infrastructure is a crucial step toward attracting investments.
Affordable housing has been brought under the umbrella of urban infrastructure projects too and the dream of a house for everybody mist just become a reality. This was the only aspect I thought lacking. I would rate the budget 9 / 10.
Railways allocation very disappointing for Karnataka: Krishna Prasad, Karnataka Railway Vedike
The Railway Budget should be released separately. The Railways have lost their sheen through the merger, for the department is now being put on par with all the rest. The 2017-2018 budget does not provide us with adequate details on funds allocated to each project, new lines, doubling, tripling, electric signalling, etc. They announced an increase from 2800 to 3500 new lines and solar lighting at stations, but where these projects are is unclear.
The status of current projects such as Tumkur-Davangere, Tumkur- Rayadurga, Gadag-Wadi, Kudachi-Bagalkote lines, doubling work and more is not shown, especially in terms of funding given and how much more they will need to spend. Air fares might just turn out to be cheaper than two-tier A/C fares. They have allotted Rs 100,000 crores for rail safety but the tracks are extremely overworked. They continue to run new trains due to political pressure. The addition of trains is more in the Northern parts of the country, while Southern regions have been ignored.
Around Rs 30,000 crores have been lost due to passenger fare subsidies in SWR. Freight fares are the bread and butter of railways but they are less in use, because road connectivity has improved through the construction of four and six-lane highways. Land acquisition is another obstacle in Karnataka, which requires intervention in our favour by the state government. The Railways budget has been highly disappointing for Karnataka as there is hardly any focus on the state.
A bold budget that attempts to clean up political system: Harish Bijoor, Brand expert
I had expected to see a budget packed with sops for people at the bottom of the pyramid, perhaps as a way to compensate for the hassles of demonetisation. None have been offered, however! The Finance Ministry’s message is loud and clear: The hope of the gains of demonetisation being used in terms of “money for public good” does not exist. In that respect, the budget is a disappointment.
However, I am very happy to see election funding reforms crafted purely from the point of view of the budget. Prime Minister Narendra Modi’s government has mandated nothing more than Rs 2000 in the form of cash donations to political parties. Now that’s a big step. A good step. A bold step. An honest step!
