Managing Partner, Khaitan & Co.

The `Achche Din' Budget aims for `sab ka saath, sab ka vikaas'” and draws its inspiration from the pragmatic words of Arun Jaitley, the new Finance Minister, `We cannot spend more than our means'.

The Budget provides excellent directional mandates, but lacks the highly anticipated `bold moves'. However, it is a concise, (mostly) sensible budget - with special emphasis to investment, infrastructure, agriculture, technology and education.

Foreign direct investment ceilings in defence and insurance have been raised to 49 per cent. The controversial retrospective tax law of 2012, contrary to expectations, has not been scrapped; but a scrutiny mechanism by a high level committee of Central Board of Direct Taxes (CBDT) has been provided for.

There are no changes in income tax rates, and exemption limits have been raised. Goods and Services Tax and tax/duty rationalisation measures look promising. Infrastructure investment trusts and real estate investment trusts have been highlighted, along with growth of the manufacturing sector, priority resolution of mining issues (including amendment of the Mines and Minerals Development and Regulation Bill), power sector reform and development, clean energy, amendment of transfer pricing regulations, development of industrial and economic corridors, smart cities and industrial clusters, and financial inclusion of unorganised and unbanked segments.

Keeping up the commitment of `minimum government, maximum governance', unified KYC, PF and demat accounts and online authorisations have been announced. Plans for Digital India for increased transparency, and incentives for e-businesses and start-ups have also been announced.

The Budget may not be dramatic, but a gold thread of progress runs consistently through it. There are areas of concern, of course. Primarily, the silence on the new Companies Act is conspicuous, and even if the retrospective tax law is not repealed, a clarification or roadmap for the future would have been appreciated. Simply leaving it to CBDT is not good enough.

However, 'Modinomics' has worked well for Gujarat in the past. Will it be able to achieve the ambitious targets of 7-8 per cent growth and 3 per cent fiscal deficit? It is too early to make predictions, for even the most eloquent budget has no significance if not implemented appropriately. We can only wait and watch.

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