2015 Budget Simplified

The Union Budget of 2015 presented by Finance Minister Arun Jaitley focused on "Make in India" with measures such as increased FDI limits, corporate tax cuts, and incentives for manufacturing. The budget also included measures to improve infrastructure and social programs. Read the article to know more
  •  3 min
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  • 11 Apr 2023

The finance minister has been a wonderful architect to Prime Minister Modi’s vision of an India for the future. As I look at the Budget from the point of view of the economy and capital markets, five key themes emerge.

  • A significant push to drive investment, particularly in infrastructure. At this stage of our economy, investments have slowed down significantly and we needed a big boost to investment in infrastructure. The Budget has made a significant effort to increase investment in infrastructure through both the Budget itself and also through public sector companies’ allocating significantly more resources for investments.

  • The Budget is a big plus for the financial sector. There have been a number of moves announced in this Budget which will boost the financial sector. Setting up of a holding company for public sector banks; increasing the focus on monetization of gold through the financial sector; focusing clearly on the importance of debit cards and credit cards as a key basis for transactions of the future; merger of FMC into SEBI; significant benefits for real estate investment trusts (REITs), again, through the alternate investment platform; all very significant steps which will help the strengthening of the Indian financial sector

  • Move away from cash. The Budget discourages cash transactions. Therefore, it will bring a lot of the informal money into the formal sector. This is good for resources for India and Indians in the future.

  • Simplification of the tax regime. No major changes and a path to a lower corporate tax over the next four years. Again, the middle class has been fully protected. The rich in India, with incomes above Rs.1 crore, will pay a little more but save on wealth tax. So the ‘keep it simple’ tax philosophy is very good for the long term.

  • The fiscal deficit for 2015-16, which was earlier anticipated to be 3.6%, may be higher at 3.9%. I do not think this is a big factor, but it will have some implications on the fact that the RBI may drop interest rates a little slower than anticipated earlier. But from the point of financial savings, this is not necessarily a bad thing because savers will continue to get better returns. Also, I am happier with a slightly higher deficit at a time like this if more money can go into investments.

All in all, I think the Budget has a longer term vision. It is something which I think will clearly help the making of India, and that is something which is important for us. I would request investors to invest long-term. This is not a quick, hit-and-run Budget; this is a Budget by an architect who is building a new India just as Prime Minister Modi wants to build a 100 smart cities. So invest patiently for the long-term; I am extremely excited about the future of India over the next five or ten years.

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