For an aspiring nation with millions of youngsters its common to have lot of hopes on tomorrow (Achche Din). In India this year with a new government the expectations on the central budget were high which some say unrealistic.
In the preceding weeks when Prime Minister talked of bitter medicine to be given to the economy, I was looking forward to it so that the patient can be cured for good. Instead what we got yesterday was lot of rhetoric talk in the budget speech, 16,536-word to be precise but little of substance or anything new. We were given No medicines, only prayers on lips.
Following were the good points I could see in Budget 2014:
Brands can operate their own e-commerce portals. Hope this paves way for Apple, Dell & other branded products are sold from their own portals like rest of the world.
- Rs.500cr on developing 5 tourist circuits (feels like pittance but still welcome)
- Rs.10,000cr on a start-up venture fund (I wish to dream it be like Singapore’s Temasek)
- Rs.100cr each on Solar park projects, execute ultra-mega solar projects
- Govt. move to ebiz portals for all clearances
I was disappointed on the following two being left out:
1. Though it was talked about no reversal of the Retrospective Tax act. This infamous act was accused by UPA critics to have been brought in particular to target Vodafone
2. No tough measures. No labour law reforms or subsidy cuts. I hope it will not be status-quo for another 5 years
Electoral victory is a (political) capital with diminishing returns every day. The new Government will do good to remember it in coming months.
Update 15th July 2014:
Like previous years this too Indo-American Chamber Tamil Nadu branch has organized a post budget analysis event. The keynote speech was by Mr.Gopal Srinivasan, CMD of TVS Capital Funds Ltd.
Mr.Srinivasan summarised his take on the union budget eloquently as a Test Match, not a 20-20 cricket with Modi’s government playing for the long term 5-10 years. He felt the focus on government seems to be on job creation. He was appreciative of Modi government embracing lot of the policy initiatives started by the previous government, which is a welcome departure in India.
Mr.Rajat Mehta of HSBC Bank & Mr.N.Muralidharan of E & Y highlighted on the below points of budget:
- Foreign fund managers if they reside in India doesn’t change the fund status which is a welcome move to attract best finance talent to India
- Banks can issue Infrastructure bonds with lesser reserve restrictions
- Disinvestment targets are double of last year which is ambitious and something previous government could never get it done
- Advance tax ruling benefits extended for domestic companies for domestic transactions, rules of which are expected to be notified when finance bill gets passed