July 5, 2019
Bottoms-up, Inclusive and Balanced Budget; Focus on Infrastructure, Affordable Housing, MSMEs and Women empowerment inspiring: PHD Chamber
While welcoming the Union budget 2019-20, Shri Rajeev Talwar, President, PHD Chamber of Commerce and Industry said in a press statement issued here today, that the Hon’ble Finance Minister Smt. Nirmala Sitharaman has presented a bottoms-up, inclusive and balanced budget with a strong focus on socio-economic development of the country to build a New India, going forward.
The proposals unveiled in it on various socio-economic fronts of the economy indicate promises of progress in coming times. The focus on MSMEs, development of infrastructure, affordable housing and women empowerment would go a long way to promote all-inclusive development in the economy, said Mr Rajeev Talwar.
The lowering of tax rates to 25% for companies with annual turnover of Rs 400 crores is encouraging as it was proposed by the industry since the last many years. It will enhance business sentiments and production possibility frontiers in the economy, said Mr Talwar.
The proposal to streamline multiple labour laws into a set of four labour codes is inspiring as simplification of labour laws would reduce the compliances for the industry particularly for the MSMEs and provide more room for deployment of workforce in the factories, said Mr Talwar.
The Budget has focused on attracting foreign investors to increase capital flows with the easing of local sourcing norms for FDI in Single Brand Retail and 100% Foreign Direct Investment (FDI) permitted for insurance intermediaries, said Mr Talwar.
MSMEs are the potential growth engine of the Indian economy. The government has very rightly diagnosed the importance of MSMEs in the economy; the announcement of 2% interest subvention for all GST registered MSMEs on fresh or incremental loans and creation of payment platform for MSMEs would facilitate them in getting better access to credit and expansion in business activities, said Mr Talwar.
The allocation of Rs. 70000 crore for the PSU bank recapitalization will enhance the health of the PSU bank and push up the pace of lending in the economy, by increasing the sentiments for credit availability.
Various praise-worthy announcements such as solving the issue of ‘Angel Tax’ by introducing e-verification, speedy assessments of start-ups and redressal of their grievances and relaxing some of the conditions for carry forward and set-off of losses for start-ups would strengthen the start-up campaign in the economy, said Mr Talwar.
A big infrastructure push such as a massive program for Railway modernization, a massive push to infrastructure connectivity through the projects such as industrial corridors, Bharatmala etc, the target of building 1.95 crore houses in the second phase of PMAY-Gramin, additional tax benefits for first time home buyer, a further tax deduction of Rs. 1.5 lakhs for interest paid on housing loans sanctioned in the current fiscal year upto 31st March,2020, will certainly push the infrastructure health of the country to the next level.
The proposal to invest Rs 100 lakh crore in infrastructure over the next 5 years is highly encouraging and put India’s infrastructure development really on a high road, said Mr Rajeev Talwar.
The setting up of Credit Guarantee Enhancement Corporation and placing an action plan to deepen markets for long term bonds with specific focus on infrastructure sector would give a big push to development of state of the art infrastructure in the economy, he said.
The announcement of blueprint for developing gas grids, water grids, i-ways, and regional airports on lines of One Nation, One Grid for power availability to all states at affordable rates is highly appreciable as it would be instrumental in developing infrastructure for not just industry but also for socio-economic development of the masses, said Mr Rajeev Talwar.
The government’s focus on encouraging PPP in unleashing faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services in railways would not only promote industrial growth but also provide better service delivery to masses, added Mr Rajeev Talwar.
The government has given prime focus to affordable housing in this budget as alignment of the definition of affordable housing in the Income-tax Act with the GST Acts and providing the limit on cost of the house at Rs. 45 lakh in line with the definition in the GST Acts would create demand in the housing and construction sector activity, said Mr Talwar.
In addition, the usage of land parcels held by Central Ministries and Central Public Sector Enterprises all across the country for public infrastructure and affordable housing is encouraging and growth provoking, said Mr Rajeev Talwar.
The additional income tax deduction of Rs. 1.5 lakh on interest paid on loans taken to buy electric vehicles and additional deduction of up to Rs 1,50,000/- for interest paid on loans borrowed up to 31st March, 2020 for purchase of an affordable house valued up to Rs 45 lakh are highly beneficial for middle class buyers, said Mr Talwar.
The Budget has a strong synergy for the new education policy and made comprehensive allocation of Rs. 400 crore for FY2019-20 to transform education system with the focus on learning outcomes which will play a big role in revising the current education level.
The Budget announced to expand the Women SHG interest subvention programme to all districts and made provisions for overdraft of Rs. 5,000 to be given to verified women SHG member. These measures would strengthen women’s role in the society, going forward.
The government’s commitment to skill development of the youth as per the current technological developments is indicative of the progressive thoughts of the government to steer economy towards growth and prosperity, said Mr Talwar.
Overall, we believe the budget is balanced, pragmatic and would rejuvenate the economic growth trajectory of the nation, said Mr Rajeev Talwar.
Koteshwar Prasad Dobhal