Live Mint, Published: 2nd March 2015
The government has announced an exceptional FY16 budget, with the finance minister successfully delivering on the nation’s expectations.
Looking back, the truncated FY15 budget had set the tone for this year’s budget. While delivering on the need to take forward structural reforms and maintain fiscal wisdom, FY16 budget has upped the ante to propel growth in sectors with strong multipliers. The multi-pronged focus of the budget on core, industrial and social sectors will allow a synchronized easing of supply side bottlenecks, job creation with a specific focus on entrepreneurship and micro, small and medium enterprises (MSMEs), and readying a highly employable workforce, along with improved standards of living. The gradual reduction in corporate tax rates from 30% to 25% over four years will provide impetus to corporates. This sets the stage for India’s growth recovery to become more balanced, sustainable and inclusive over the medium run.
To re-engineer the education delivery architecture and establish premier educational institutions, the budget has granted ₹ 68,968 crore. The establishment of a National Skills Mission under the skill development and entrepreneurship ministry which will consolidate initiatives across 31 sector skill councils will help skill youth to provide an employable base for the ‘Make in India’ mission. The minister has also placed a special focus on helping entrepreneurs, thereby helping them make a transition from job seekers to job creators.
The FM’s intent to deepen the Indian bond markets is a big positive, recognizing the role of the financial markets in stimulating the economy. This will improve access to debt capital.
Recognizing the importance of entrepreneurship, the budget has provided a strong thrust on MSMEs with a synchronized effort to a) encourage innovation and b) improve access to finance. In this spirit, the budget announced a corpus of ₹ 20,000 crore to set up a Micro Units Development Refinance Agency (Mudra) Bank for the MSME sector and boost growth of small business and manufacturing units. The government also announced measures to set up an electronic trade receivables platform for SMEs, which will boost the liquidity available to such enterprises and also address the working capital crunch faced by the sector due to delayed periods of receivables. Propelling growth in the sector, which constitutes close to 57.7 million units, contributes around 45% to industrial output and 40% to total exports, creates a natural setting for job creation and makes successful the government’s ‘Make in India’ pledge.
I rate the budget a resounding 9 on 10.
-By Rana Kapoor Managing Director and CEO of YES BANK
Source – https://www.livemint.com/Opinion/yScR0MKzurC4NL0T3Xs8tJ/Budget-scripts-Indias-growth-story.html