Indian budget aims at high growth path

Global Business

It was the Narendra Modi government’s first full budget and hopes were running high. Everyone expected a budget to help revive the Indian economy and realize the dreams of billions of Indians

With more on the economic plan the Indian government presented, Shweta Bajaj has this report from New Delhi.

It was a budget, which was watched closely. There were lots of expectations, especially to create jobs and take India on a high growth path. The Indian finance minister did not let people down by announcing a budget that addressed various concerns. The attention was on infrastructure sector. The investment in infrastructure will go up by $11.3 billion in the 2015-2016 fiscal year. A national infrastructure fund will be set up along with tax-free infrastructure bonds for infrastructure projects like improved roads, rail and irrigation. There will also be a restructuring of public private partnership where the government will take up majority of the risk.

The Indian finance minister said all this will made possible by making India investment friendly.Investors spend a large amount of time and resources on getting the multiple permissions required.We aim towards ease of doing in India. I have myself launched the e-Biz Portal which integrates 14 regulatory permissions at one source. However, if we really want to create jobs, we have to make India an investment destination which permits the start of a business in accordance with publically stated guidelines and criteria,” said Arun Jaitley, Indian Finance Minister.

As India’s finance minister Arun Jaitley delivered his first full budget speech under Narendra Modi, he said India’s growth in financial year 2015-2016 will be between 8 percent and 8.5 percent. Taxes for corporate India were reduced from 30 per cent to 25 percent and wealth tax was abolished but India’s super rich would now pay two percent tax on income above $1,62,000 per year.

“I am very happy over all. It is not a big bang budget but a long term – four, five or seven, eight years visionary budget. It has not made any cheap announcement here and there but is looking at the growth of India and development which the agenda of the government,” said Sudhir Jalan,co- chairman, Rieter India PVT LTD.

Many expected that India would do away with subsidies and put its money in expenditure. But instead, India announced that it would boost the efficiency of a rural job creation scheme called MNREGA that is India’s costliest welfare program. It would also boost direct welfare payments into bank accounts, and gradually replace benefits in kind.

India’s budget for years has been a political statement with an aim to make please everyone but this time it was all about the economy with an attention on growth. India’s poor have also been given attention with a social security scheme and an insurance plan.

That’s not all, with attention on manufacturing sector, India will also be putting in money into job creation and skill development to take advantage of its two-third population that is below the age of 35.

Karan Chanana talks about the impact on Indian businesses

Some critics question whether India’s budget reforms go far enough.
Karan Chanana is CEO of the first family owned Indian company to list on the New York Stock Exchange.
CCTV spoke to him about the impact of the budget on Indian businesses.