FM announced a fiscally responsible budget: G. Murlidhar, MD & CEO, Kotak Life Insurance

With a clear focus on becoming a $5tn economy in a few years, the budget has supported infrastructure investment plan of Rs100 tn in five years, focus on higher education and development of youth (strengthening research through NRF, Study in India initiative, the allocation for world-class higher education institutions), and digital initiatives.

Jul 05, 2019 02:07 IST India Infoline News Service

“Hon’ble FM Nirmala Sitharaman announced a fiscally responsible budget with a focused vision on long-term goals, intent, and framework. With a clear focus on becoming a $5tn economy in a few years, the budget has supported infrastructure investment plan of Rs100 tn in five years (along with railway modernization, PPP in railway projects, and a plan for upgrading 1.25 lakh km of roads in five years), focus on higher education and development of youth (strengthening research through NRF, Study in India initiative, the allocation for world-class higher education institutions), and digital initiatives (incentives for digital payments, tax on cash withdrawals). It has to be ensured that infrastructure investments and skill development should lead to job creation.
 
This budget focuses on fundamentally important elements like affordable housing (additional tax incentives, as well as 1.95 cr rural houses under PM Awas Yojana leading to “housing for all” by 2022), disinvestment (Rs.1.05 tn target for FY20), environment (promoting manufacturing and purchase of electric vehicles), rural development (“Har Ghar Jal”), and social security (pension benefits extended to 3 cr shop owners). There is also a credible effort to aid fundamentally sound NBFCs with partial credit guarantee for PSBs investing in their securitized assets.
 
Some areas could have done with more attention. For example, while the above-expectation Rs.700 bn PSB recap plan is welcome, one would have expected concrete steps for governance reforms in banks. One would have also expected specific measures to induce growth in long-term financial savings of households, which are critical for long-term investments. Overall, the government has stuck to the path of fiscal prudence with the reduction of the deficit to 3.3%.”

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