Union Budget: One Of The Most Sought Out Budget

After the “Dream Budget” presented by P Chidambaram in year 1997, this union budget was one of the most sought out budget. The finance minister presented a balanced budget that will give boost to both infrastructure and manufacturing. This will help India to utilise its demographic dividend to its advantage. To achieve this government has even relaxed their fiscal discipline targets. This will spur a growth in infrastructure in country. We believe that growth in infrastructure is backbone for the double digit growth GDP growth.

Although Union Budget has not taken any quantum jump in terms of announcement, the direction has been set that will help government to spur overall growth of economy in medium term. These are some of the major announcements.

• The budget for FY16 attempts to revive the investment cycle.

• The proposal to progressively reduce corporate tax to 25 per cent in four years time will help rationalizing the corporate tax regime

• Other key positives in our view is the proposal for a new bankruptcy law, plans to monetize  the gold holdings, clear focus on black money and penalties therein, deferment of GAAR and the reiteration of April 2016 deadline for GST

• Wealth tax has been eliminated and a new Super Rich Surcharge of two per cent (on income exceeding rupees one crore) has been put in place.

• The visa on arrival program will be increased to cover 150 countries in a phase manner from the existing 43, which will lead to a huge step forward for tourism in India.

• Announced merger of the Forward Markets Commission (FMC) with SEBI. This step will lead to improve credibility, transparency and regulation of the commodity futures market