‘Budget a boost to business confidence’

Kiran Mazumdar-Shaw

Kiran Mazumdar-Shaw  

Finance Minister Nirmala Sitharaman presented a Budget that was directionally sound but may not expeditiously revive the Indian economy.

The Budget has boosted business confidence for India Inc. through various measures, including the proposal for a tax payers’ charter to prevent harassment by officials, increasing the investment limit of foreign portfolio investors (FPI) in corporate bonds, allowing sovereign wealth funds to invest in infrastructure and making the Dividend Distribution Tax (DDT) applicable to individuals instead of companies.

However, the Budget may not move the needle in terms of boosting consumption spending as the reduction in tax rates will not increase disposable income in the hands of the salaried middle class when exemptions are being withdrawn. Transferring DDT to recipients will also take money out of the hands of the retail investor.

So, while it’s true that the Budget will improve business sentiments, investments by India Inc. may take a few years to kick in, thus postponing economic recovery and the timelines for achieving a $5-trillion Indian economy.

What was heartening about this Budget were the investments announced towards harnessing the potential of Science & Technology for developing the kind of future technologies that will enable India to take a leadership position globally.

(The writer is

CMD, Biocon)

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