Budget FY2015, a good start says Angel Broking

Union Budget 2014-15 review by Angel Broking

Budget FY2015 highlighted the new government’s rational approach towards policies for taxation, government spending and growth. Infrastructure, housing and finance sectors were amongst the biggest winners, with key measures announced to improve fund availability for low-cost housing (through National Housing Bank [NHB]), real estate projects (through Real Estate Investment Trusts [REITs]) and infrastructure development (through banks and infrastructure investment trusts). Amongst other key positives, foreign direct investment (FDI) limit in defense equipment and insurance sectors has been increased to 49%.

Fiscal prudence was maintained, sticking to a 4.1% fiscal deficit target. While the tax revenue assumptions may still be a bit on the optimistic side, but a key area where the budget math differed from the vote on account was in its assumption of higher non-tax receipts. This indicates the new government’s resolve to accelerate the disinvestment agenda amongst other things. It has set the disinvestment target at `58,425cr for FY2015.

In line with the government’s election manifesto, smart cities, industrial corridors, higher education, low cost housing and various roads, ports, airports and other infra projects are expectedly going to be the thrust areas. The budget also indicated areas on which policy measures can be expected in the coming year such as coal availability, gas pipelines, urea, ship-building, etc. All in all, there is a lot in the budget that creates optimism of continued policy impetus yet to come across a range of sectors.

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