Hailing the first full Budget of the Narendra Modi Government as being strong on vision, Chairman and Managing Director of Bharat Forge ltd on Monday said that it has come at a time when green shoots of economic revival appear to be taking root.
"It also comes on the back of huge expectations. My impression is that the Finance Minister Arun Jaitley has delivered a Budget which is strong on vision, reflects clear intent to put the economy on the path of double digit growth and has a strategy to execute challenging reforms in critical areas," he said while reacting to the Union Budget which was presented by Jaitley on February 28.
Kalyani added that from a macroeconomic perspective, the Government has done well to meet the fiscal deficit target of 4.1 per cent. The softening of global crude oil and commodity prices has contributed in a significantly lower current account deficit.
"Foreign Exchange reserves at $340 billion are at an all-time high. The Government is committed to keep inflation at below 5 per cent. All these factors have given the Finance Minister a platform to lay out a road map of lowering fiscal deficit to 3.9 per cent in FY 16, 3.5 per cent in FY 17 and to 3 per cent in FY 18," Kalyani felt.
The Budget clearly provides a tremendous impetus to "Make in India". Increased investment in infrastructure of Rs 70,000 crores and a higher allocation of Rs 2,46,727 crores for the defence sector will clearly provide a boost to domestic manufacturing industry and help in creating new employment opportunities, he observed.
The industrialist felt that these investments would help revive the investment cycle and contribute to increasing the share of manufacturing in national GDP from 15 per cent to 25 per cent. "As a follow up, we now expect the Government will expedite announcement of the new Defence Procurement Policy to facilitate larger private sector participation in Defence production. The steps to facilitate "ease of doing business" will further support revival of growth in the domestic manufacturing industry," he added.
Roll out of GST from April 1 2016, announcement of five ultra-major power projects a 4,000 MW each which will give a boost to the capital goods industry, the initial Rs 1,200 crores allocation for the Delhi Mumbai Industrial Corridor with assurance for more funds later, significantly higher investments in the renewable energy sector, opening of opportunities for Medium and Small industries, emphasis on the housing sector and corporatization of Ports, are some of the key enablers to achieve manufacturing growth, Kalyani noted.
He welcomed the road map to reduce the basic rate of Corporate tax from 30 per cent to 25 per cent over the next four years, and felt that deferment of the applicability of GAAR for two years and avoidance of retrospective taxation will considerably increase confidence of domestic and foreign investors. The decision to abolish Wealth Tax and replace it with an additional 2 per cent surcharge on individuals with higher incomes is also a good move, Kalyani felt.
"While the Finance Minister did speak about the need to push exports, I am slightly disappointed that Minimum Alternate Tax and Dividend Distribution Tax on Special Economic Zones have not been withdrawn or at least lowered as was expected. We hope the new Foreign Trade Policy to be announced next month will provide incentives for exporters," he said.
