Belying lower expectations of the markets and people in general, the Government has delivered a very positive, inclusive and growth oriented budget. The Government seems to be firm on pursuing further reforms and the intention is articulated by the Finance Minister in his budget speech seeking to introduce bills on banking, insurance; pensions and companies in this session or this fiscal which will restore confidence of the foreign investors.

In the budget, the FM has ensured renewed thrust on the rural infrastructure and agri economy with higher allocation of Rs 58000 cr for Bharat Nirman and proposing to invest in a four-point programme to improve agri productivity and storage. This will boost the economy and result in more entrepreneurs in the rural India, and will help increase opportunities for AFCs to partake in this credit requirement. 

Lower fiscal deficit and lower than expected borrowings of government will definitely help in better liquidity and interest scenario for the private sector including AFCs. The FM has taken measures on rural housing by setting up of a Rs. 3000 cr fund, increased limit to Rs. 15 lakhs from Rs. 10 lakhs for interest subsidy and increased limits of priority home loans to Rs. 25 lakhs from Rs. 20 lakhs. All these will lead to overall growth of affordable housing and related core sectors such as cement, steel, transportation and financial services for these sectors.

Though budget announced an increased FII limit including on investment in infrastructure,  from USD 5 bn to USD 25 bn and higher infra spend at Rs. 2.14 lakh crores, we would have liked to see more concrete measures on infrastructure project execution and stream lining of related governmental clearances. Even now, land acquisitions, environmental clearances and local government or political issues continue to keep stalling many worthy infra projects.

For the corporates, the budget seems quite neutral or cost positive in the sense that on the one hand ,  there is a reduction of surcharge from 7.5% to 5%, while lot of services such as air travel, hotel stay etc. will become costlier with service tax being applicable to them. 

While overall it is a growth oriented budget with specific thrust on Agriculture, Infrastructure with a desire to touch all sections of the society, a further firm measure on Process surrounding infrastructure projects and its approvals as also action on unearthing black money would be our expectations from the government going forward.”

The author is Sanjay Chamria, Vice Chairman & MD, Magma Fincorp Limited