Long Term Oriented And Directionlally Right Budget

Mr. C K Ranganathan, Chairman & Managing Director, CavinKare Pvt. Ltd.

The Budget 2017-18 has been a transformative and inclusive in nature. As a follow on measure to demonetisation which gave address tag to the black money stock, this budget has brought in various measure to control generation of black money like banning of cash transaction over Rs.3 Lac, disallowance of cash transactions of over Rs.10000/- in corporates, limiting political donations in cash form to Rs.2000 etc. These measures coupled with GST introduction and the Digital push would go a long way in broad basing the tax base and setting new norm for the way business is done.

Though the budget could not stick to the promise of gradual reduction of corporate tax from 30% to 25%, it has reduced the same to 25% to the MSME sector which forms lion’s share of the corporate. Similarly, it has also addressed the concerns small business having turnover of upto Rs.2 crores by reducing the presumptive tax from 8% to 6% which is clean 25% concession.

As regards individuals, the middle class who stood in long lines during demonetisation is given a sweetener in the form of reduced 5% tax rate between Rs.2.5 lac to Rs.5 Lac. This tax break coupled with interest subvention for housing loan now defined in carpet area as against built up area is a welcome measure. Further, applicability of long term capital gains for immovable properties upon completion of 2 years itself as against earlier 3 years is a positive move.

The budget has done justice to the macro economic criteria by fixing a reduced target for revenue deficit at 2.1% for 2017-18 against 2.3% for 2016-17, containing fiscal deficit at 3.2% well within the norm, reducing the current account deficit at about half of previous year, merging railway budget with general budget, doing away with plan and non plan expenditure and targeting a larger and cleaner GDP in the future.

The budget is inclusive in multiple ways, be it 24% increased allocation to agri and allied sector at Rs.1.87 lac cores thus giving higher push to doubling farm income in 5 years, be it fixing an enhanced limit of Rs.48000 crores for MNREGA coupled with tagging of assets created, be it higher allocation to defence spending, be it highest ever allocation to infrastructure growth both for rail and roadways, be it empowerment of rural youth by skill india, be it empowering by enhanced welfare initiatives for poor and marginalised women, be it over 35% higher allocation to Schedule Cast people, be it construction of 1 crores rural houses, be it giving digital push for cost saving and recording of transactions.