The judgment day arrived as the Finance Minister Arun Jaitley presented his maiden Union Budget in the parliament. There have been different views of India Inc on the Budget presented by the finance minister.
Some experts view this budget as well defined and prudent. On the other hand, some view it as visionless. An article in Economic Times says that the Arun Jaitley's budget is more or less like that of Chidambaram's interim budget and FM has not done any major reforms.
So, the question is, given that the government's hands were tied on the fiscal front, has Mr Jaitley played a better role than his predecessor?
On the positive side, the FM has promised to take some key important steps which have been lingering since last few years. The proposal of rolling out GST further in the near future itself seems an alluring idea. Over and above that raising FDI cap in insurance and defense sectors also opened the gates for foreign investment in India. This clearly indicates government's interest in attracting long term foreign funds in key sectors. Addressing infrastructure bottlenecks and putting forward various schemes to boost agriculture growth also looked quite exciting. In short, the budget backs Modi's ideology and has proposed reforms and investments route.
The union budget has also successfully identified the key areas for India's poor fiscal and economic health. Plus the target of narrowing down the deficit to 3.1% also looks quite appealing. However, in our view the current Budget lacked detailed planning. For instance, just like his predecessor, the current FM too is relying on divestments to fund the deficit. The target seems to be achievable as the markets sentiments have improved. However, higher emphasis could have been on improving tax to GDP ratio. More attention towards tax perspective with higher clarity on retrospective taxation could have also been helpful. Plus some path-breaking reforms to curtail subsidies could too have aided to the government's fiscal deficit.