Budget 2018 aiming to achieve sustainable growth: Arun M. Kumar, KPMG in India

NewsBarons
2-Feb-2018

India Budget 2018

Budget 2018 is a pro-growth one, aiming to achieve sustainable growth. Agriculture and the rural economy have received the attention they deserve. The proposal to promote cluster-based models for horticulture, raising of farmer MSP to 1.5 times the value, and stimulating agriculture exports by setting up food parks would add new growth dynamism to the sector. The 21 percent increase in infrastructure spending on the one hand will provide a much-needed impetus to the economy, while the reduction in corporate tax rate for enterprises with turnover of INR250 crore on the other, will facilitate investments and job creation. The new health protection scheme is a key milestone in India’s journey towards building a robust social security net. In sum, the Budget 2018 has brushed aside short-termism while giving more emphasis to long-term vision.

The Union Budget is to be applauded for its long term focus on investments in hard infrastructure such as smart cities, transportation and digital connectivity in both cities and rural areas, and in the soft infrastructure needed to provide healthcare and education. There is a focus on the common man, bringing to the fore a narrative of ease of living for all citizens that goes beyond ease of doing business. The corporate tax break to MSMEs is particularly welcome as these are the enterprises that have the potential to maximize employment generation.

With selective interventions, the Budget 2018-19 is growth friendly and largely centres around agriculture, education, healthcare and employment creation. The revised fiscal deficit target at 3.3% is credible and merited in order to give the economy the much required momentum. Also the large increase in direct and indirect tax payers is encouraging. The reduction in corporate tax for SMEs with turnover up to INR 250 core is likely to benefit India’s mid cap firms.

The Union Budget is to be applauded for its long term focus on investments in hard infrastructure such as smart cities, transportation and digital connectivity in both cities and rural areas, and in the soft infrastructure needed to provide healthcare and education.

There is a focus on the common man, bringing to the fore a narrative of ease of living for all citizens that goes beyond ease of doing business.

The corporate tax break to MSMEs is particularly welcome as these are the enterprises that have the potential to maximize employment generation.

Arun M. Kumar is the Chairman and CEO of KPMG in India

(Source)