Budget 2017 presented by Finance Minister Arun Jaitley is growth oriented with a special focus on rural, agriculture and infra sectors.
Demonatisation in November 2016 resulted in a general downturn in the economy, but the rural sector in particular bore the brunt.
The allocation of a record credit of Rs 10 lakh crore, along with a major push to the rural sector with 25% rise in MGNREGA (Mahatma Gandhi National Rural Employment Guarantee) allocation, and the special focus on improving roads and electrification, will not only ease the pain in this sector, but give it a fillip.
This is indeed a welcome move which should, in due course, improve the rural economy and thereby rural spending.
Nearly Rs 4 lakh crore has been set aside for investment in infrastructure, of which Rs 2.5 lakh crore is for transportation alone. If executed well, this has the potential to provide a serious push to the economy and the Auto sector in particular.
The reduced tax rates for small taxpayers of income up to Rs 5 lakh, as also some reduction in corporate tax for the MSME sector will also provide a demand impetus.
However one area that India Inc was really looking forward to was reduction in the corporate tax rate as promised by the Finance Minister in his Budget speech two years ago. But there was no mention of this in the Budget 2017 speech and this is a matter of concern.
No doubt, the Government has adopted a balanced approach by projecting a fiscal deficit of 3.2% of the GDP and diverting the liquidity arising out of the demonetisation to public spending with a view to spur growth. However, for sustainable growth in the economy, private investments need a fillip.
Talking specifically about the Tyre sector, we were immensely hopeful that the inverted duty on rubber will be addressed in this Budget in view of the Government's avowed move to increase value addition within the country.
However, it is indeed disappointing and a matter of continuing concern that natural rubber again doesn't find mention amongst the items on which duty inversion has been corrected.