Finnesse – The Finance Club of IMNU organized an expert session on the Union Budget with Mr Sunil Parekh – Strategic Advisor at Zydus Cadilla. The panel also included Prof RJ Mody, Prof Bindi Mehta and Prof M Mallikarjun.
Mr Parikh sought to start his presentation on the Budget by asking the audience – “Kya Vakahi Acche Din Aane Wale Hain?” He stressed the importance of the budget for everyone in the country saying that the Budget was a document that would play a key role in determining the demand in the domestic sector, the growth rate of the economy, issues related to raising money for the business, the exchange rate of the Indian currency and above all, the profitability and growth rate of the companies in the country. In the past few years, there has been a loss of economic growth from a high of 9.6% to as low as 4.3% due to the effects of the global slowdown, impacts of weather, monetary tightening by the central bank and subsequent loss of investment. He pointed out that the new government could have started the budget session by outlining a road-map for the next 5-10 years which would have given the country a fair idea of how the government plans to tackle the difficult economic scenario. The budget may have disappointed all those with high expectations, but there are some key announcements which are noteworthy:
1- A firm emphasis on taking faster decisions would speed up the pending projects and add value.
2- Proposal for tribal entrepreneurship and MSME support worth ₹ 10,000 crore each is noteworthy as this would lead to development of the backward regions.
3- Opening up of defence, insurance and real estate sectors for FDI
4- 100% FDI allowed in e-commerce will accelerate the pace of e-commerce in India
5- Manufacturing will receive a boost following the proposal for developing four Industrial Corridors and 20 industrial clusters.
6- Initiatives for gas grids, slurry pipelines, Low Income Housing, creation of trusts for investing in Real Estate and Infrastructure are noteworthy
Concluding his part, Mr Parikh said that the economy will receive a push if all proposals are implemented properly. At the same time, he cautioned that “acche din” will be some time away as the economy will slowly revive itself from 4.3% to 5.6% in the next fiscal. He termed the budget forecast of 8% growth as “an ambitious target” which, nevertheless, will be hard to achieve.
Earlier in the session, Prof Bindi Mehta sought to emphasize the need for independence of the fiscal policy on the lines of monetary policy. Prof Mody remarked that the budget was practical, made a good beginning and looked at areas of convergence rather than divergence. He hoped for more clarity on GST, subsidies, application of labor laws and environmental laws and the need of auditing of MGNREGA. Prof Mallikarjun said that the budget was a sign of political maturity in the country as the second interim budget was a continuation of the first interim budget unveiled by the UPA-2 government. The budget also looks more towards the private sector in its contribution to investment. He remarked that the government has taken some steps in the right direction such as creating an expenditure commission, clarity on retrospective taxation, etc.
The session concluded with a Q&A round with the audience.
(Content Courtesy: Jijo George; Photo Courtesy: Pratikriti – The Photography Club)