Budget is growth oriented and pragmatic and brings about structural & systemic reforms

I would like to commend the FM for paving the way to a simpler tax regime and giving a clearer direction on issues like GAAR & GST, writes DCM Shriram MD.

Vikram S Shriram        Last Updated: February 28, 2015  | 20:02 IST

Vikram S Shriram, vice chairman and managing director, DCM Shriram
The Budget is growth-oriented, pragmatic, and brings about structural and systemic reforms. On an overall perspective, I would like to congratulate the Finance Minister for some path-breaking proposals in areas like pension schemes, health insurance and the announcement of the Social Security System etc., which are good for the framework of our society.

There were a lot of progressive announcements on economic growth and stimulus to infrastructure sector, which would have a positive impact on all our businesses:

  • Sharp increase in outlays of roads and railways. Capital expenditure of public sector units to also go up.
  • National Investment and Infrastructure Fund (NIIF), to be established with an annual flow of Rs 20,000 crore to it.
  • Tax free infrastructure bonds for projects in the rail, road and irrigation sectors.
  • PPP mode of infrastructure development to be revisited and revitalised.
  • An expert committee to examine the possibility and prepare a draft legislation where the need for multiple prior permission can be replaced by a pre-existing regulatory mechanism. This will facilitate India becoming an investment destination.
  • Housing for all - two crore houses in urban areas and four crore houses in rural areas.
  • Announcement of overhaul of capital gains taxes to pave the way for the listing of Real Estate Investment Trusts (REITs) in the country will help in unclogging the real estate sector.
All these announcements in the infrastructure sector will further help build ancillary industries around the projects, and also give additional employment in the areas that the projects are implemented.

 

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But for our company, the increase in coal cess by Rs 100 per tonne coal will have a negative impact on our commodity business.

The FM laid out many positive announcements for the agriculture sector, which will further help in growth of the rural economy and our agri-businesses also. Major steps taken to address the two major factors critical to agricultural production - soil and water - were:

  • Rs 5,300 crore to support micro-irrigation, watershed development and the 'Pradhan Mantri Krishi Sinchai Yojana'. States were urged to chip in by the FM.
  • Rs 25,000 crore in 2015/16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs 15,000 crore for Long Term Rural Credit Fund; Rs 45,000 crore for Short Term Co-operative Rural Credit Refinance Fund; and Rs 15,000 crore for Short Term RRB Refinance Fund.
  • Target of Rs 8.5 lakh crore of agricultural credit during the year 2015/16.
  • FM spoke of the need to create a National Agriculture Market for the benefit of farmers, which will also have the incidental benefit of moderating price rises. Government to work with the States, in NITI, for the creation of a Unified National Agriculture Market.
  • Forward Markets commission to be merged with Sebi will be better for the commodity industry, which should help in better price discovery in the forward market.
I would like to commend the Finance Minister for paving the way to a simpler tax regime and giving a clearer direction on issues like GAAR & GST.

It is surely a good and balanced Budget.

(The author is Vice Chairman & Managing Director, DCM Shriram)

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