Budget 2015-16 is ‘growth-oriented’ : KPMG
Arvind Mahajan, Head of Infrastructure and Government services, KPMG, India
Arun Jaitley’s first full Budget, was presented in a favourable context with India’s growth beginning to accelerate and fiscal deficit and inflation coming down. Mr. Jaitley’s “growth oriented” budget sets the Agenda for government to achieve 8% growth in FY16 and poised for over 10% p.a. over next 5 years.
Key emphasis of budget was on increasing investment in infrastructure sector, providing roadmap for transforming the indirect and direct tax regime, more effective direct transfer of subsidies, emphasis on making it easy to Make in India & Skilling India and special focus to key social initiatives of government such as Swach Bharat ( preventive health), Jan Dhan Yogana ( financial inclusion) and Digital India ( bridging digital divide)
He has stepped up public infrastructure spending by $12 bn in FY16, especially in railways & highways to kick start investment in the sector. While there is no immediate relief for stalled infrastructure projects the plan to create a Bankruptcy code, re-booting of PPP model, public contracts (resolution of disputes) bill are steps in the right direction
Finally he has laid ground for a competitive and predictable tax regime which is less adversarial. He has set stage for introducing GST by April 2016, thereby transforming Indirect Tax regime which will help create a common Indian market. Also provided a roadmap for direct tax regime including reduction of corporate tax over next 4 years, deferral of GAAR by 2 years and abolition of wealth tax
Overall a budget which tried to balance economics with politics. While this was not Big Bang reform budget but has attempted to create a institutional & regulatory framework for the future.
S.V.Sukumar, Partner & Head of Manufacturing Sector, KPMG, India
Re-affirmation of implementing GST from 1st April 2016, investment in infrastructure especially on Road and Rail will have positive impact on manufacturing sectors. Thrust on creating six crores house should also propel demand in a few related sectors like metals and cement etc.
Directional steps towards improving “Ease of doing business” needs to be appreciated as that reflect the intentions of the Government.
Over all this budget is more focused on creating infrastructure for the manufacturing industries, clarity on taxes and building confidence about Indian economy and policies. These will have an indirect impact on “Make in India” campaign.
