Mar 17, 2012, 11.24 AM | Source: Moneycontrol.com
SPA Research has come out with its report on Union Budget 2012- 13.
, SPA Research |
The Union Budget 2012-13, which is tabled at a time when growth has slowed down, embarked on a clear cut strategy of boosting investments in social sector, infrastructure and power, yet showing fiscal consolidation. With state elections getting over, this was excellent opportunity for honorable Finance Minister to take some strict reforms, as the government may take some populist measures in the next budget before 2014 general elections. Instead it laid more emphasis on pleasing the “Aam aadmi” by changing tax slabs and by opening up new avenues for investments in Equity through Rajiv Gandhi Equity Saving Scheme. He also chose to boost sentiments for investors by reducing the security transaction tax, thereby giving a phillip to capital markets.
The minister acknowledged the need to review fiscal stimulus and achieve fiscal prudence. The Government is targeting to reduce the fiscal deficit next year to 5.1% in 2012-13 from 5.9% in 2011-12 by increasing tax revenues, better expenditure management, reducing subsidy burden, a politically sensitive issue and maintaining divestment of PSUs. However this year too, surging crude oil prices and ballooning food subsidy will again pose serious challenges in managing deficit. Addressing malnutrition, black money and corruption in public life have been specified amongst 5 priorities in year ahead. Enhanced spends on social welfare schemes & UID project; proposal to improve reach of banking facilities to masses ensures Inclusive growth. The infrastructure sector got a leg up as the government increased plan allocation, doubled limit tax free infrastructure bonds and enhanced funding options. Overall, Budget touches upon important issues of consolidation, inclusive growth and investments. Implementation remains a key – which, if achieved, can take India to next pinnacle of Growth.
To read the full report click here