Budget Reactions: FM rolls out popularistic, progressive Budget: KPMG India

Richard Rekhy
KPMG India 

“Overall, this is a welcome reformist and directional Budget, which maintains a deft balance between economics, sustainability and inclusivity. The Budget delivers a prudent fiscal management perspective and has emphasized a number of sectors like Infrastructure and Low cost Housing, Agriculture, Financial sector, Manufacturing, Education, Healthcare. These have the potential to place the economy on an accelerated growth trajectory. The announcement of taking up waste to energy projects in PPP mode addresses the twin issues of sustainability and energy deficit.

Besides, FM has soothed the investor nerves by announcing that modified GAAR will take effect from 2016 and also provided direction for GST and DTC implementations.

The FM has lent more positivity to CSR obligations by adding a provision of investment of CSR funds to be channelized into "funding the technology incubators within the Indian technological institutes". This could lead to a large amount of technological innovations, interventions in water, sanitation, energy and health access to the rural population of India. Though the FM has recognized that the CAD is a bigger issue than the fiscal deficit and on Fiscal Deficit he has started delivering results (closing the books at 5.2%), there is no mention on how he will bridge the gap on CAD  (fast heading towards 6% of GDP).”

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