Steering away from populist reforms with holistic focus on economic growth
The Budget of July 2019 provided an exemplary overview of the way forward for the Modi Government. The Budget elementally reflected the overall growth vision rather than extensive elucidation of reforms.
Announcing a slew of measures at her maiden budget, Nirmala Sitharaman focused on fostering steep economic growth, increase in Foreign Direct Investments (FDI), reforms to increase job opportunities, increase in disinvestment, the strategic sale of loss making companies which helps the government to benefit from periodic infusion of funds. We are also encouraged by the focus on improving overall health of the economy by recapitalizing banks. The encouragement to the corporate sector with expansion of the 25% tax rate to all companies with revenue less than Rs. 400 crores is commendable as well.
The budget is also very promising for start-ups – the additional capital gain exemption, reducing scrutiny on angel tax and extending valuation justification exemption to Category 1 AIFs are all likely to strengthen the funding ecosystem and simplify access to capital for the vibrant Indian startup ecosystem.
The Budget, in a comprehensive sense, reflects the way forward for Modi 2.0.