With a 5-year tax holiday for hospitals, the private sector will have a strong incentive to invest in the healthcare provider space, particularly in terms of higher hospital capacity in the country. The new tax exemption on premium paid for medical insurance of parents to the tune of Rs15,000 p.a. will provide a further boost to health insurance penetration in the country. These significant initiatives in the healthcare space should ensure a stronger healthcare system in the country.

The cornerstone of India’s success as a knowledge economy has been a significant base of educated population. The government’s thrust in this regard with higher allocations for both greater capacities as well as improving quality of education is a big positive for the long-term robustness of the services industry.

Inflation is one of the biggest risks to growth and hence, inflation management is a key concern for policy-makers. The government’s decision to broadly maintain stability in indirect tax policies, with minimal changes essentially to address cost push inflation, is laudable. At the same time, the minister has also attempted to tackle the demand side by increasing the limits of income tax exemption. More money in the hands of the consumer along with stable prices clearly augurs well for the growth of the economy.
In spite of the considerable investments planned, Finance Minister has been able to achieve the objective of maintaining overall fiscal discipline with fiscal deficit targeted at 2.5% of GDP for the coming year. Although, this may be slightly tough to maintain, the intention is certainly commendable. Overall, the Union Budget 2008-09 was a ‘no surprise’ Budget, which is what a Budget should be.

Rating : Not Rated