Budget, an act of tight-rope walking: Murugappan

While the Centre is walking a tight rope with respect to fiscal deficit, especially due to corporate tax cuts (despite higher receipts from RBI), there was a case for a fiscal stimulus expected in the budget, as the RBI has called for in the recent policy statement.

The Government acknowledged its fiscal challenges, resorting to the escape clause in the FRBM (pushing up the deficit to 3.8% in FY 20 & 3.5% in FY21) with total expenditure increase by 13% (higher increase in capex) resulting in incremental improvements across sectors, he said.

According to him, while continuing to remain committed to the doubling of farmer’s income, the Government has laid out a longer term plan for the agricultural sector, detailing 16 broad initiatives that would help achieve Government’s objective. The Government’s move to make the sector market oriented through contract farming, land leases etc., provides a positive push to this sector.

The Government’s recognition of importance of non-farm activities and their role in enhancing farmer’s income is a welcome move. However, the lower allocation for the MNREGA compared to the Revised Estimates may not be par for the course, he said.

Murugappan said about NBFC sector that the change in SARFAESI norms for debt recovery for the NBFC sector could aid in improving recoveries and help ease some of the stress in this sector. With the recent challenges in the co-operative banking sector and increasing uncertainty amongst the depositor community, the Government’s move to increase deposit guarantee to Rs. 5 lakhs from Rs. 1 lakh will help restore some calm.

Sharing his insights on co-operative federalism, he said the decision of the 15th finance commission to keep the net proceeds of the Union Government’s tax pool unchanged at 42% to the States bodes well with the Government’s agenda of cooperative federalism.

The changes made in personal income tax space may reduce tax burden of a large section of the taxpayers. However, the options need to be weighed against each other to understand the new scheme’s attractiveness, he noted.

The announcement for 100 new airports under UDAN is a positive move that will strengthen an already successful scheme. Importantly, this is the first budget where the Government of India has tried to bridge the trust deficit with corporate India and the fact the FM has said she will not tolerate tax terrorism and there will be a tax charter are positive signs. Concessions to sovereign and pension funds to get long-term funds for infrastructure are positive too. Several suggestions given by corporate India have found a place in the budget- the fact that the government will work hand in hand with corporate India is in itself a positive signal Ajay Singh, CMD, SpiceJet 

The government’s initiative to remove DDT will lead to additional funds in the hands of companies that will definitely promote investment and expansion. Entrepreneurship has always been in our country’s DNA. The proposition of providing a single e-market platform, subordinate debt schemes and audit exemption from Rs 1 crore to Rs 5 crore, looks promising for the MSMEs across the country Arjun Ranga, MD, Cycle Pure Agarbathies

Steps like setting up of warehousing facility by Food Corporation of India and Warehousing Corporation of India on their land will allow businesses to realise the importance of an establishing an integrated network of logistics and warehousing. The development of seamless cold storage facilities will boost exports of food, dairy and horticulture produced in India. Addition of 9000 km of economic corridors and 2000 km of strategic highways are going to support warehousing sector across the country Sunil Rallan, CMD, J Matadee Free Trade Zone