According to industry veterans
and business stalwarts, Union budget for the financial year 2015-16 presented
by the honorable finance Minister Mr. Arun Jaitley is a very good effort
to reform and revive the economy at the same time sending a clear signal about
the government’s stand towards achieving fiscal discipline.
The major takeaways of the union
budget are listed below
GDP growth for the financial year
2015-16 is expected between 8 percent and 8.5 percent based on the new series.
Fiscal deficit for the financial
year 2015-16 is expected at 3.9 percent of the GDP.
JAM Trinity – Jan Dhan, Aadhar
and Mobile – to implement direct transfer of benefits.
Goods and Services Tax will be
implemented from April 1st 2016.
Monetary policy committee will be
setup to with the objective of keeping inflation below 6 percent by making
amendments in the RBI act.
Housing for all by 2022 with basic
facilities of 24-hour power supply, clean drinking water, a toilet, and road
connectivity.
Connecting each of the 178000
unconnected habitations by all-weather roads.
This will require completing 100000 km of roads currently under
construction plus sanctioning and building another 100000 km of road by 2022.
62% of the total tax receipts of
the country will be transferred to the States thereby achieving true spirit of
co-operative federalism.
Target of providing `8.5 lakh
crore of credit for agriculture during the year 2015-16.
Micro Units Development Refinance
Agency (MUDRA) Bank will be created with a corpus of 20000 crores which will refinance
Micro-Finance Institutions.
Electronic Trade Receivables
Discounting System will be established for the financing of trade receivables
of MSMEs.
Increasing access of the people
to the formal financial system with the help of post offices.
Social security to the citizens
with the help of Pradhan Mantri Suraksha Bima Yojna, Atal Pension Yojana and Pradhan
Mantri Jeevan Jyoti Bima Yojana
SETU (Self-Employment and Talent
Utilisation) to support all aspects of start-up businesses.
Creation of a separate Ministry
for skill development which is about to launch a massive program.
The Government also proposes to
set up 5 new Ultra Mega Power Projects, each of 4000 MWs in the plug-and-play
mode.
Public Debt Management Agency
(PDMA) will be set up with the intent of deepening of the Indian Bond market.
PDMA will bring both India’s external borrowings and domestic debt under one
roof.
FMC will be merged with SEBI
thereby strengthening the regulation of commodity forward markets and reduce
wild speculation.
Financial Redressal Agency that
will be set up to address grievances against all financial service providers.
Gold monetization scheme to bring
the yellow metal into the financial system thereby reducing the import.
In order to promote cash less
transactions, steps will be taken to incentivize credit or debit card
transactions, and dis incentivize cash transactions.
The National Optical Fibre
Network Programme (NOFNP) of 7.5 lakh kms networking 2.5 lakh villages is being
further speeded up by allowing willing States to undertake its execution, on
reimbursement of cost as determined by Department of Telecommunications.
It is pretty much clear about the
long term plans of the government from the above mentioned points.
Government wants to build basic
infrastructure like roads and electricity so that it can reduce the supply side
bottlenecks in the long run. At the same time fiscal discipline has to be
followed. That is why FM put the fiscal deficit target of 3 percent in three
years instead of two years so that he can fund the infrastructure projects
using the additional capital.
Government has taken a very bold
approach in handling subsides because they know that a large amount of
subsidies is going into undeserved hands. Since subsidies are unproductive in
nature, it is very much important that only the deserved people receive
subsidy. The proposed JAM trinity has therefore a lot to do in this area at the
same time it will help the government to deepen the financial inclusion plan.
Manufacturing is very crucial for
every economy because of the number of employment opportunities it generates,
formation of fixed capital etc. but the share of manufacturing in our GDP is
meagre 17 percent. Promoting manufacturing is very important because we have to
generate a lot of jobs in the coming years. Creation of the enabling
infrastructure, creating desired skill sets to meet the demand etc. are also very
important parameters in achieving the manufacturing growth. Big outlays for the
creation of basic infrastructure, creation of a separate Ministry for skill
development and other provisions for education will help to achieve that.
MSMEs and startups create a lot
of employment opportunities. The proposed Micro Units Development Refinance
Agency (MUDRA) Bank and SETU (Self-Employment and Talent Utilization) will help
them in achieving tremendous growth at the same time it will promote more
educated people to enter into entrepreneurial ventures.
Monetization of gold is also a
very crucial step taken by the government. It will help to bring huge amount of
yellow metal into the financial system thereby reducing the import. It is going
to have a positive impact on our import bill.
Budget has provided a clear path
towards achieving economic prosperity in the long run. But it all depends on how
well these things are taken care off in the coming days. Let’s hope for the
best.
References
http://indiabudget.nic.in/budget.asp
http://indiabudget.nic.in/bspeecha.asp
Regards,
Hari
Views are personal. :)
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