What are your views on the Union Budget of India (2017-18)?

What are your views on the Union Budget of India (2017-18)? by @balajivis

Answer by Balaji Viswanathan:

Yet again, a pretty decent one. More guided by prudence than pomp. By merging the railway budget with the union one and preponing the dates, they have signaled some fundamental reforms. Since India’s financial year starts on April 1, it gives a 2 month window from the budget to get the execution in place. In the past scheme of things, budget was released by end of Feb and the Parliament would take 2 months to debate & approve, with the spending going only by the end of summer. Thus, most ministries would not be even able to utilize the allocations they have been given.

The most important one is that the government has been fiscally prudent, the third budget in a row. Instead of going on a spending spree to get votes, they are improving the long term stability of the system by not letting the deficits go up. Since the government is spending within limits, it is quite possible for the RBI to cut interest rates down now that will put more money with the entrepreneurs and create more jobs. To make sure the senior citizens are not that hit with rate cuts there are also schemes for assured interest rates [8%] for them.

Pushing towards cashless economy gets more teeth and that is a central pillar with which the government plans to increase tax collection while reducing tax rates. The reforms for donations to political parties will also improve transparency.

In keeping up with its promise of a minimal government, the government is doing away with the FIPB [Arun Jaitley did a great thing by abolishing FIPB] that was more hindering foreign investments than promoting it.

In infrastructure, there is a push towards electrifying 100% of the villages by next budget. Budget 2017: 10 measures to boost India's infrastructure. Of course, not all houses in those villages might be connected to the grid by next year, but that would be the next battle. More housing focus is also there this time followed by more spending on railway infrastructure. PM's incentives may bring millions into affordable housing.

There is a heavy push on female welfare development – Spending on women-related schemes up 18% in Budget 2017 – and this will help India’s HDI in the long run.

There are some negatives like not big increases on spending on healthcare, research or education.

Overall, it is like Rahul Dravid playing a test match. There are no fireworks or “DLF Maximums”, but there is a lot of prudence building up for the long term.

What are your views on the Union Budget of India (2017-18)?

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