India growing to become a $5trln economy

The ability for NRIs to get their Aadhar card on arrival is a winner all the way. It is laudable and I appreciate the government’s effort to integrate NRIs. In addition, the easing of the foreign direct investment (FDI) restrictions in single brand retail, opening of FDIs in aviation, insurance, media and animation sectors will be significant as the great Indian diaspora now feels more and more integrated with an ability to financially invest and secure their interests in the ‘Great India Story.’ The ability for foreign investors to buy debt of listed real estate trusts is again an opportunity to NRIs to be part of the real estate story which is burgeoning and booming across India. Ease of Living and Ease of Doing Business is a welcome slogan.

Budget looks very positive with overall focus to improve standard of living by providing piped water, electricity, gas, housing, toilets to all. The government is definitely focusing on transforming rural India, which is a good sign for the development of the nation. The budget is a pragmatic one and will surely boost foreign investment in India. Reduction in corporate tax, promoting digital payments, encouraging start-ups and infrastructure development are positive signs and is expected to push the economy.

Budget to be a great game changer and supports private entrepreneurship with regard to the farm sector. This is a conscious effort to bring majority of the Indian population who are directly or indirectly dependent on the agricultural sector into the mainstream of the country. Emphasis is given to rural and agricultural development. This will bring 68 per cent of Indian population — dependent directly or indirectly on agriculture — into the mainstream of economic activity.

India’s biggest asset has always been our young human resource and the measures taken in the fields of research and education will surely go a long way in boosting start-ups in various fields and across all economic segments. Women entrepreneurship and making India the global education hub of excellence. It is good that the focus is in education, there is also proposal for “Study in India" programme which will help in setting up autonomous institutions.

To stimulate consumer demand and propels greater investments and higher growth for the nation, government also announced a few brilliant schemes such as waiver of charges/fees on digital transactions and reduction of corporate tax to 25 per cent for companies with an annual turnover up to 400 crores. This is a huge saving for corporates working. Reduction from 30 per cent to 25 per cent is also a game changer. For the record, 90 per cent of companies in India fall under this bracket. This will encourage businessmen to pay their taxes and will further encourage employment. Tax deducted at source (TDS) levy of 2 per cent on annual cash withdrawals exceeding INR1 crore. This is a bold move that is duly supported by an able payments infrastructure, and with no charges or merchant discount rates (MDRs) imposed on customers or merchants, the friction for adoption is bound to be minimal.
On the infrastructure side, the plan to revitalise the railways, the back bone of internal trade is highly encouraging. Boost is given to PPP model of development and investments in the infrastructure sector, so obviously it’s heartening to note that the government is promoting this model. Surely many organizations will come forward to be a part of this opportunity, to spur faster growth.

Promoting rural India which can generate new jobs while releasing the pressures on urban cities by announcing Gaon Garib & Kishan schemes; by promising power and gas to every single household by 2022 and by handing over 20 million rural homes; by building 100 million toilets making India free from open defecation. Pension to 35 million. Sagarmala, national electricity grid, connecting rivers, huge spends on railway network will boost domestic and export economy. Water resource is vital and it is good that a new Jal Shakti Ministry is being set up.

The emphasis on programs such as BharatNet that promotes universal connectivity and digital literacy will continue to facilitate grassroots level digital adoption and change. The budget also partially addresses the issue of Angel Tax — a perennial grouse for start-ups — and will go a long way in supporting the expansion of the start-up ecosystem in the country.

* The author is the Managing Director, World Wide Business House