- Ajay Chopra
A budget is an exercise that a government carries out annually and at basic level it serves the purpose of outlining the manner in which money collected by the government from us - the taxpayers - will be utilized. This year’s budget was even more historic as it heralds the completion of two decades of liberalization initiated in 1991 by Dr. Manmohan Singh, the then Finance Minister.
A budget is an exercise that a government carries out annually and at basic level it serves the purpose of outlining the manner in which money collected by the government from us - the taxpayers - will be utilized. This year’s budget was even more historic as it heralds the completion of two decades of liberalization initiated in 1991 by Dr. Manmohan Singh, the then Finance Minister.
So, did the budget meet the expectations on this front? Well, answer is both yes and no.
Yes, in the sense that coming in midst of high inflation and global economic pandemonium and with the pressing needs of social and infrastructure sector investments the Finance Minister has done a commendable job of maintaining continuity. Mr. Pranab Mukherjee has also put a thrust on increased expenditure in these areas which will result favorably for the logistics sector. The tax-free bonds of INR 30,000 crore to boost infrastructure will reap benefits in terms of improved transport infrastructure. Investments in warehousing of up to INR 2,000 crore and Cold storage projects being classified as infrastructure are encouraging signs.
The bad news in the budget is in the sense that coming at such critical juncture the budget fails to bring any path – breaking initiatives. It shows certain timidness on the tax front on both direct and indirect taxes areas. For example, the DTC while announced still fails to include all provisions into it and while there was mention of GST roadmap a number of times, no clear timelines still emerges. On custom duty also once again individual items have been looked at for concessions instead of systemic improvement.
The biggest challenges confronting the Indian economy currently are inflation (especially the volatile food prices) and the slow speed of infrastructure development. Last year National Highways were constructed at the rate of only 4 kms per day as against the target of 20kms per day. These find no concrete solutions or action plan in the budget document.
(Author: Mr. Ajay Chopra is the Chief Executive for Drive India Enterprise Solutions Ltd. (DIESL), a TATA group company.)
