The merger of the railway budget with the general budget failed to show any added advantages, with the railway budget ending up being sub-par. Another front where the budget failed was the meagre allocation of 10,000 crores towards bank recapitalization in the face of mounting NPAs and approaching deadline for implementation of Basel III norms. Although, the rising oil prices, the 7th Pay Commission and the reduction in the income tax rates would put further pressure on the government for meeting its target of achieving a fiscal deficit of 3.2% of the GDP.
Demonetization, being one of the most hotly contested topics prior to the budget saw considerable stimulus in the budget. The revision of withdrawal limits from ATMs, the introduction of BHIM app and Aadhar pay along with the cut in direct tax rates are measures likely to offer some relief to the cash-starved economy. These measures will potentially boost demand in the economy and the increase in public spending will ensure that the effects of demonetization will not spill over to the next financial year.
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About the Authors:
Anand Mittal and Girraj Goyal
(Members, Finance & Investment Club, IIM Shillong)
Comments
ramji yahoo
contribute to society thru management audits, cost audits
The article covers all points and compact. The only missing thing in the article is Indirect taxation issue but the FM also has missed out that in the budget. No big incentive in Indirect taxation, to support manufacturers in India
6 Feb 2017, 12.13 AM
+Read Replies (1)
naivedh jain
I think the introduction of GST will surely fill the issue of indirect taxation which is a form of a tax levied on goods and services rather than on income or profits.The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.
6 Feb 2017, 12.32 PM |