In the Budget for 2016-17, the Finance Minister has made a welcome reiteration of the Government’s commitment to uphold fiscal discipline without compromising on capital expenditure. The decision to stick to the fiscal deficit target of 3.5% is commendable and this clears the path for monetary easing, which in turn can have a positive impact on growth.
The move to list the government-owned general insurance companies is a welcome step, as it will help the government unlock significant value and make the sector more vibrant and robust.
Several key measures such as crop irrigation and crop insurance schemes, higher FDI in food processing, among others will provide a boost for the rural economy.
The highest ever budgetary allotment to key infrastructure sectors of roads and railways and the proposal to develop a framework for resolution of disputes in infrastructure and guidelines for renegotiation of PPP agreements are important steps. This Union Budget for fiscal 2017 thus focuses on growth as well as maintaining stability of the economy.
The author is Chanda Kochhar, MD and CEO, ICICI Bank