Finance Minister, Arun Jaitley has placed a huge emphasis on agriculture and rural India, allocating bulk of resources to interior landscape, while helping the middle class salaried employees along with relief to senior citizens, measures which would boost consumer demand and help revive economic growth, said Sandeep Jajodia, president, ASSOCHAM.

 

“The budget is on expected lines and provides support to sections of the society, where it was needed the most. The FM and the Prime Minister Narendra Modi know how to put the money where the mouth is. The agri and rural landscape were in some kind of distress and provision of over Rs 14.34 lakh crore to be spent on rural infrastructure should also add to the employment generation especially in the farm sector,” said Jajodia. “This money would come from non-budgetary sources.”

 

“Relief to the salaried employees by way of INR 40,000 per annum would leave more disposable income in the hands of the middle class and boost consumer demand,” added the ASSOCHAM president.

 

He also said what stands out is the reform in the agriculture marketing. “The launch of 585 e-mandis and linking them with 22,000 APMC mandis, without applying restrictive clause would help farmers as also those companies engaged in agri –processing, FMCG including organised big retail chains. One of the major problems associated with the Minimum Support Price (MSP) was its implementation. Now, the finance minister has committed that the NITI Aayog would coordinate with the state governments to ensure that the farmers get price of their produce which is one and half times of the cost. 

 

“Initiatives like Operation Green to stabilise prices of highly political and consumer sensitive onion and potato would help ease the retail inflation and would help the RBI in keeping interest rates on lower side,” further said Sandeep Jajodia. The ASSOCHAM chief added that pick up in rural demand resulting from easing of distress, would help India Inc as well.

 

He also said that while the finance minister has marginally exceeded fiscal deficit targets, but if expenditure involves a quality spending, the outcome would only help economic growth. “But we have to ensure that these milestones are honoured.”  As for the long term capital gains, the ASSOCHAM expected that market would take it in its stride.

 

The Finance Minister also kept a lot of emphasis and budget allocations on healthcare, especially in the rural sector. The universal health coverage is key to realising the demographic dividend. As for the business reforms, the announcement of allowing fixed employment contract to all the sectors would help the industry in hiring. The ASSOCHAM also lauded the budget for reducing corporate tax for companies which have a turnover upto INR 250 crore. This would help revive the business sentiment among the MSMEs. The chamber said adding the initiatives on startups and Make in India are also noteworthy.