The key challenges facing the Indian economy are agrarian in nature and hence a thrust on rural India was needed in Budget 2016, that is the word coming in from Economics Affairs secretary Shaktikanta Das. While speaking at the 'CNBC-TV18 Mint Budget 2016 The Verdict', he said the other areas which needed attention were public investment and infrastructure and the government has done a lot on both these fronts. The combination can make India grow at 8 percent in the near future, according to him.
Almost the entire Team North Block came face-to-face with India Inc at the event and sparks flew as they clashed over taxes and reforms.
The other issue that has grabbed the attention of everybody is what the government has done with Provident Fund (PF). The NDA government has said that 40 percent of the total amount withdrawn at the time of retirement will be tax exempt, under both recognised Provident Fund and National Pension Scheme (NPS). But revenue secretary Hasmukh Adhia said the aim is to encourage people to put money into annuity products so that they can continue to get pension throughout their lives.
Talking about the Krishi Kalyan Cess, which loosely put means an increase in service tax, Das said it was done because the government needed more resources to spend on infrastructure.
Meanwhile, the minister of state for finance Jayant Sinha said the government has been trying to build off-budgetary resources, which will be supplementing public investment.
On the various issues plaguing the banking sector, Sinha said the Bank Board Bureau will play a major role in PSU banks' consolidation. While speaking about a bad bank, Sinha said: "A bad bank will be a deposit taking institution, it can't help solve the NPA issue. A stressed asset facility makes more sense than a bad bank."
The new NITI Aayog CEO Amitabh Kant said if the government wants to maintain 3.5 percent fiscal deficit in FY17, it has no other option but to sell its stake and the list of CPSEs for strategic sale will be drawn in a fortnight. In his Budget speech for 2016-17, Finance Minister Arun Jaitley had said NITI Aayog will identify the CPSEs for strategic sale.
Taking the issue further, the new divestment secretary Neeraj Gupta said he will be looking to list some public companies in FY17 as only 44 of 235 PSUs are currently listed.
Kant also said the Budget has given a huge thrust to manufacturing and it was focussed strongly on technology and ease of doing business.
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