“The Finance Minister had an extremely tight rope to walk, balancing a severely constrained fiscal space with the need for higher government expenditure for boosting investments and consumption. She has done that well in addressing the key priorities while being within the bounds of the Fiscal Responsibility and Budget Management (FRBM) Act”, said Vikram Kirloskar, President CII.
The announcements related to agriculture, specially encouraging states who adopt model laws, will pave the way for adoption of the much needed agri reforms, leading to better returns for the farmers as well as enhanced private sector engagement with agriculture.
Applauding the announcements on Infrastructure, Kirloskar said that Infrastructure has always been a key priority of the Government. The National Infrastructure pipeline, the focus on the transport sector and railways, will not only create jobs but will also boost productivity and efficiency of Indian businesses. The project creation is being backed by efforts to make infrastructure financing available. The INR 22,000 crores equity support to IIFCL and NIIF to create a funding pipeline of INR 103,000 lakh crores and granting 100% exemption to interest, dividend and capital gains income of the Sovereign Wealth Funds in respect of investment made in infrastructure are very important initiatives for funding infrastructure creation.
On the manufacturing front the government’s approach of focussing on developing specific sectors with potential is a welcome move. We hope to see more of this approach in the coming times, as also recommended by the Economic Survey, added Kirloskar. The proposed national logistics policy and boost to electricity generation by extending the 15% corporate tax option to the sector, will support the manufacturing initiatives. On the external front, reviewing Rules of Origin under various FTAs will address the issue of Indian Industry getting impacted due to imports getting routed FTA countries.
The Union Budget 2020 presented amidst a slowdown, both in the domestic and global economy, continued the slew of bold reforms that the Government has initiated since August last year. CII expects the reform process to continue beyond the budget announcements.