Shobhit Mathur, Executive Director, VIF
The Union Budget presented on Feb 28th was highly awaited as it was the first full budget to be presented by the Narendra Modi government. It promised to indicate the direction of the Economic Policy from the new government which came to power with a historic mandate.
Though there were no big bang announcements made, the Budget was overall positively accepted by all sections of the society because of a series of practical steps announced. Personally for me, the following 3 provisions stood out:
- Monetizing Domestic Gold Stock: Indians hold about 11% of the World’s gold.It is considered as an unproductive asset. The finance minister should be commended for unlocking this potential through the Sovereign Gold Bonds. This will move domestic investments from gold to financial assets.
- The JAM Trinity: The budget has not reduced any subsidies but has instead focused on targeting them better and reducing leakages. The JAM (Jan Dhan, Adhaar, Mobile) trinity will help in ensuring that the last person gets the benefit of the subsidies. It was the foresight of the Prime Minister to launch the missing link i.e. Jan Dhan Yojana on the Independence Day and make sure that it is executed well.
- Commitment to Cooperative Federalism: The Prime Minister has shown commitment to Cooperative Federalism through the setting up of NITI Aayog, increase in devolution of resources to the states and now committing on April 1st 2016 as the date for the much awaited GST. The service taxes have been moved up accordingly to the eventual rate of GST.
Overall the budget is high on vision, and now the focus shifts to the execution.