Union Budget-2016-17: Comment by Mr. CK Ranganathan - Chairman & Managing Director of CavinKare Pvt Ltd

BUDGET FOR RURAL WELFARE & GOVERNANCE TRANSFORMATION
• Commendably and rightfully, the Budget 2016-17 has retained fiscal deficit target at 3.5% while at the same time did not compromise on spending;
• Schemes like highest ever MGNREGS spending, irrigation schemes making 28.5 lac hectares fertile, funding of panchayats and municipalities for localized infrastructure needs; spending in rural / national highway / railways would increase rural employment & welfare;
• The 100% FDI in marketing of food products produced and manufactured in India would help avoidance of wastage of over 30% of farm produce and higher realization to farmers;
• The social sector schemes like cooking gas to rural women, crop insurance, interest subvention on agri loans, medical insurance to BPL families will go a long way in increasing the standard and comfort of living of the rural people;
• Incremental farm realization and employment opportunity would lead to higher disposable income in the hands of rural India which would benefit infra and FMCG industry at large;
• The limited window black money unearthing scheme and resolution of retrospective tax issues would clean up the legacy issues;
• Laws like bankruptcy law, insolvency law, GST law, statutory back up to aadhaar card and amendments to companies act coupled with the bank recapitalization proposals would help the reformative ideals of the country;
• Changes in tax administration including avoidance of face to face meetings between tax authorities and assessee and moderation of discretion of IT Authorities in terms of penalty provisions and prolonging litigations would help the transformative ideals of the country;
• Digital India, start up India, Mudra Bank funding, tax breaks for new companies, PF subscription for certain categories of employees would all lead to incremental job creation;
• Rationalisation of exemptions and tax on larger dividends received at 10% over and above the dividend distribution tax would add to the cost of doing business;
• Salaries class has no material benefit except a small Rs.3000 rebate in sub Rs.5 lac category, an incremental house rent benefit and conditional interest benefit on first home loans;
• Overall, subject to reading fine prints, the Government seems to have taken steps in the right ernest towards balanced growth of rural and corporate India i.e. ‘sab ka saath, sab ka vikas’.