Agencies, New Delhi
Armed with a massive mandate, the Modi Government today unveiled its maiden Budget,announcing its road map for major reforms to revive the ailing economy by boosting manufacturing and investment and revamping the tax regime.
It also gave minor sops to the common man by raising the personal income tax limits.
In his debut Budget, Finance Minister Arun Jaitely set a target of achieving 7-8 per cent economic growth in the next 3-4 years, bringing down fiscal deficit to 3.6 per cent of the GDP in 2015-16 and 3 per cent in 2016-17.
He also proposed to raise the caps on foreign investment in the defence and insurance sectors to 49 per cent from the present 26 per cent.
In his over two-hour-long speech, the Finance Minister said he had no option but to take bold steps, and underlined that these steps were only ‘’directional,’’ marking the beginning of the journey, of the effort to revive growth spirit of the Indian economy.
Referring to Prime Minister Narendra Modi’s slogan of ‘Sab ka saath, sab ka vikas’( development of all), Mr Jaitley said, ‘’I shall leave no stone unturned in creating a strong and vibrant India.’’
The Finance Minister, who took a five-minute break in his long speech, also announced to have the GST in place by the end of the year, a much-needed reform that would bring uniformity in taxes of all the 29 states and boost both revenue and business.
Highlighting the difficult economic situation faced by the country, Mr Jaitley called for fiscal prudence and revival of growth by boosting manufacturing and investment in infrastructure. The Finance Minister also announced that a high-level committee would be set up to review retrospective tax claims that had deterred foreign investors. This, he said, was being done to allay the fears of both home and foreign investors.
‘’We are committed to provide a stable and predictable tax regime that would be investor friendly and spur growth,’’ he said.
The FM also promised to retain the target of keeping fiscal deficit at 4.1 per cent of the GDP set by the previous government. ‘’Difficult as it may appear, I have decided to accept this target as a challenge,’’ he said.
As far as tangibles for the common man were concerned , there was some relief for income tax payers. The Budget announced a Rs 50,000 increase in the personal Income Tax (IT) limit from Rs 2 lakh to Rs 2.5 lakh for individual tax payers below 60 years of age and from Rs 2.5 lakh to Rs 3 lakh for senior citizens.
Congratulating Mr Jaitley for his maiden budget, Prime Minister Narendra Modi expressed confidence that the Budget will take India to new heights of progress.
He stated,’ This Budget is a new ray of hope for the poor and downtrodden sections of society.’
Mr Modi said that for the moribund economy, this budget has come as a ‘sanjeevani’ (new life) and an ‘arunoday’ (sunrise) for the last man in the line. The Prime Minister said development should be all-encompassing (‘samaveshak, sarvadeshak, sarvasparshi’) and should also reach those parts of the country which had remained underdeveloped.
ASSOCHAM described the Budget as realistic. It said though, there were no big bang announcements, it set achievable targets.
Industry body CII termed the proposals ‘’pragmatic and extensive’’ that lay out a medium-term vision for the economy and meet industry expectations on growth and employment creation. However, the Opposition was not enthused by the Budget, ‘’There is no clear roadmap in the Budget. It is just a laundry list of Rs 100 crore proposals,’’ Congress vice-president Rahul Gandhi said.
The Budget has an outlay of Rs 5,75,000 crore, which marks an increase of 26.9 per cent over the actuals for 2013-14. Mr Jaitley said the increased allocations were targeted towards agriculture, capacity building in health and education, rural roads, national highways infrastructure, railways network expansion, clean energy initiatives, development of water resources conservation. The Budget shows a revenue deficit of Rs 2,10,244 crore.