However, it does set a directional approach, and is indicative of a medium to long term road map to achieve a 7 per cent to 8 per cent growth. It is also in sync with the election manifesto and outlines a policy framework for future.
The reduction of the fiscal deficit from 4.1 per cent in 2015 to 3.6 per cent in 2016 and 3 per cent in 2017 is a tall task. It is not clear how this would be realised. Overall, it appears to be an investor friendly, growth oriented budget.
Setting up an expenditure management commission is a step in the right direction.
The focus on reviving the manufacturing sector and job creation is once again a positive approach. Increasing the FDI cap in select sectors, particularly in insurance and defence to 49 per cent was as anticipated. The major negative is the non-repealing of the retrospective tax. Review of the transfer pricing regulations was overdue. Tinkering with benefits through individuals through direct taxation will generate a positive sentiment amongst the salaried class.
Generally speaking, the focus on inflation, housing and infrastructure, education, rural road development and the agriculture sector should provide the desired impetus to growth.
Therefore, whilst the intentions and direction are clear, it yet has to be seen how the FM can earn enough to pay for growth-oriented initiatives.
Disinvestment is a source of revenue generation to meet the deficit.
The modus operandi was not spelt out.
However, diluting stakes in PSU Banks and yet controlling interest was an indicator of the disinvestment plans during the current financial year.
Rolling back of subsidies was also not explicitly clarified.