At the outset and personally I feel this is a budget of India and not of any party. I am briefly touching upon 3 of the 9 pillars mentioned by the Finance Minister.
The much needed impetus, by making substantially increased allocations, is being thought for both Agriculture and Rural Development, which is what major working population of this country is either engaged in or resides in. There are many proposals in this budget, which if implemented successfully, will certainly improve the standard of living of agricultural & rural populations. Once they have purchasing power, it will create demand, which in turn will help in growth of economy as a whole for India.
Another important focus area, to support the above two areas, is infrastructure development. This is proposed with development of all modes, i.e. Raod, Rail, Water and Air, as under:
- The target to implement Pradhan Mantri Gram Sadak Yojana is being speeded up to construct 2.23 Lakh kilometers of roads. To support the connectivity of rural with urban there is additional allocation made for Roads, Highways and Railways. Making 10,000 Kms of Roads and upgrading 50,000 Kms of State Highways into National Highways are being taken up.
- It is proposed to modernize existing ports to increase their efficiency and develop new green field ports on both coasts. In addition it is decided to expedite work on National water ways.
- It is proposed to resurrect some unused/ un-served/non-functional airports/airstrips in partnership with State Governments.
Certain novel reforms are being thought of for exploring oil and gas from existing and discovered but unexplored sources as well as for new source discoveries. Even the pricing mechanism is being re-considered for this sector.
Power sector is another area which is being supported with sufficient budgetary allocation and by a very transparent coal auction system, which has yielded highest coal production growth in last few decades.
To facilitate mobilization of resources for above spending, in the form of Public Private Partnership (PPP) model, following proposals are made:
- a separate Bill is being proposed to resolve the dispute relating to infrastructure construction contracts;
- bring in transparent guidelines for renegotiation of concession agreements;
- have new credit rating system for infra projects with emphasis on in-built credit enhancement structures.
Apart from the above sectors, there is one particular direct tax mobilization proposal which has created some anxiety in the minds of large majority of small tax payers, especially with regard to withdrawal of EPF. The proposal to tax 60% of withdrawal invested after 1st April 2016 has given a sudden jolt to the plans of many salaried workers/employees. The post budget clarifications have created more confusions rather than clarifying the intention of the FM. As an abundant caution I suggest let us not give any opinion on this proposal as of now and wait for the final clear suggested change proposed. I say this because after reading the clarification/s given by those who are involved in budget making exercise, I am confident that there seems to be a difference between what was intended and what is put in black and white. So let us all wait with our fingers crossed on this very significant change proposed in the Budget.
The move to bring in certain professionals, having gross receipts up to Rs. 50 Lakhs in a year, under presumptive tax will certainly reduce the efforts being made by them to comply with requirements under Income Tax Act. A very welcome change!