The Union Budget presented by Mr. Arun Jaitely, Hon’ble Finance Minister of India on 28th February 2015, is the 1st full Budget of the NDA Government regime in India and perhaps marks the beginning of a new Era of high inclusive growth.
India has gone from the days of gloom and doom to mass euphoria in the last 10 months. The way both Indians and global investors look at India today and what they expect from it in the short-run, is somewhat unrealistic. But this Euphoria has put India back on the Global map as the Destination To Do Business. There are initiatives that are being taken to enhance the “Make in India” mission with impetus being given to improve manufacturing capacities, undertake technological improvements, increase productivity and provide employment to its masses coupled with social security.
A large number of infrastructure and other projects have been cleared by the Government only recently. The impact on the economy in general and sentiment in particular is yet to be felt .
Initiatives are being taken to improve the FDI by allowing pass through status to AIFs and also simplify the taxation of REITs and INVITs.
The Finance Minister’s promise to reduce the peak taxation rate from 30% to 25% over the next 4 years, along with cut in exemptions is to make India a competitive place to Do Business in comparison to other economies in the Indian Subcontinent and the ASEAN.
It was about time that stringent measures to crackdown on Black Money and Benami Transactions were taken as laid down in the Budget.
The abolition of the Wealth Tax, the burial of the Direct Tax Code and the deferment of the GAAR are bold moves by the FM. To compensate this he has increased marginally (0.618%) the tax on the super rich taxpayers.
The promise to reduce the fiscal deficit to 4.1% and CAD to 1.3% of GDP has been kept. The share of services has increased from 48% in FY 11-12 to 53% in FY 14-15. In line with this the tax rate on services has been increased to 14% and the exemption list pruned. India is coming of Age.
The macro indicators of the economy, the impact on the different sectors of the Policy initiatives and the direct and indirect tax proposals have been discussed in the presentation made by the S.R.D. Knowledge Team.