Ten positive aspects of Budget for Indian economy

Vivek Sharma
Financial Planner and Trainer

The budget for financial year 2013-14 has been widely debated. There are different and varied views on the budget. While budget has been relatively lackluster for the middle class in India and Mr. Chidambaram’s admirers in the stock market has given it thumbs down, the budget does have some good ingredients for the economy and may help economy in the days to come. Let us look at ten positive aspects of the budget:

• The fiscal deficit target has been achieved for the last financial year as fiscal deficit stand contained at 5.2 percent and the in the coming financial year the target has been set at 4.8 percent which if achieved will be great news for the economy.
• Plan expenditure for next year is going to be Rs Rs 5,55,322 crores which will be 29.4 percent more than the revised estimate of current year which is a good news because plan expenditure are drivers of growth.
• Agricultural credit is going to be increased to 7 lakh crores which will help agriculture grow which in turn promote economy. The private banks have been allowed to participate in interest subvention scheme for crop loans.
• A company investing Rs 100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will be entitled to deduct an investment allowance of 15 percent of the investment. This will be in addition to the current rates of depreciation. There will be enormous spill-over benefits to small and medium enterprises.
• MSMEs will be allowed benefits or preferences enjoyed by them  for upto three years after they grow out of the category in which they obtained the benefit.
• Government has initiated an ambitious IT driven project to modernize the postal network at a cost of Rs 4,909 crore. Post offices will become part of the core banking solution and offer real time banking services.
• Provision of Rs.10000 crores have been kept for food security which will be used after Food Security Bill is passed by the parliament
• Expenses on rural development increased by f 46 percent. Under the various heads of rural development expense MGNREGS will get Rs 33,000 crore, PMGSY will get Rs 21,700 crore, and IAY will get Rs 15,184 crores.
• All the branches of public sector banks will have ATM by 31-Mar-2014 which will be great achievement and great convenience for common man
• Insurance penetration will be increased in the country and no prior approval from IRDA is required to open Tier-2 cities. Also KYC  done by banks will be accepted for buying insurance products also.