The end of February 2015 saw the unveiling of the first
full-fledged Annual Budget by the Finance Minister, Mr. Arun
Jaitley. The expectations from this Budget were similar to the
release of a Hollywood blockbuster and no less. The pain points in
the Indian economy are several; reviving investments, pushing
sluggish exports, stagnant manufacturing and importantly, to get
growth back on track. The anxiety was heightened owing to the need
for much-wanted Tax reforms with the key agenda items being ;
removal of tax uncertainties, creating a non-adversarial tax regime
and the all-important tax reform - roll-out of Goods and Services
Tax (GST) w.e.f April 01, 2016.
The Budget provides a rounded delivery on most expectations but
the key remains, the execution. After a long time, one got the
sense that the Budget was drafted by Policy-makers and not the
bureaucrats and had a sense of fresh approach all pervading.
Although, most would admit that the Budget was not a big bang
exercise, it has set tone for long term revival of growth of the
Indian economy and seems poised for GDP growth in excess of 8% for
As one would recall, the Government led by Mr. Narendra Modi got
a mandate from the people of India on the promise of wide economic
reforms across sectors to revive the sluggish economy. The reforms
agenda and deliverance on this promise is being measured constantly
by the business community and the media.
The reform in insurance sector was set off with increase in the
foreign direct investment ('FDI') from the existing limit
of 26% to 49%. This notification has ensured hectic pace of M&A
activity with foreign joint venture partners in insurance companies
seeking to raise their investment threshold in investee companies.
This apart, in the wake of the Supreme Court cancelling allocation
of 204 coal blocks, the Government initiated coal block auction and
out of 33 blocks that have been auctioned, the Government has
realized a whopping US $ 31bn which will kick start investment in
capital goods and transport of equipments. Following these game
changers in the energy sector, the telecom spectrum allocation has
realized no less than US $18 bn. The divestment target (dilution of
Government holding in public sector undertaking) is set on an
ambitious note and would all but achieve its target for fiscal
Also, in line with the election promise, the Government has
embarked on passing of an ambitious Land bill through the ordinance
route (Presidential assent as opposed to passing of bill through
both the houses) which will set right the much needed Land
acquisition regulations, critical for the growth of the industry
and low-cost housing.
Lastly, the big Agenda that the Government need to quickly
resolve is to improve the index-rating of the 'Ease of Doing
Business' in India which is vital to win confidence of the
foreign investors to do business in India. Incremental steps have
been taken at regular intervals to bring about this transformation
which India importantly needs to address. Despite chronic
challenges that India has always faced, the future of Indian
economy is set on a high growth course backed by the spirit of the
private enterprise that is, world class.
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