FICCI on Union Budget 2014-15

Commenting on the Union Budget 2014-15 announced on July 10, 2014 at New Delhi, Sidharth Birla, President, Federation of Indian Chambers of Commerce and Industry (FICCI) said “Through this budget the finance minister, Arun Jaitley has set the ground for repair of the economy. There has been a mix of both short term and long term measures geared towards boosting confidence of all key constituents”. “He presented the budget in a very difficult situation and what we have is a set of progressive announcements that will be the key building blocks for engineering a turnaround in the growth trajectory over the next two to three years”, he added.

“One of our key priorities was to see a clear course of action to end tax adventurism. The government has tried to address this by promising to not to change any of the tax provisions retrospectively which creates a fresh liability and committing to provide a stable and predictable taxation regime that will be investor friendly and spur growth. We strongly welcome this change in disposition”, said Birla.

The budget also contains further measures to tackle food inflation in the form of establishment of a Price Stabilisation Fund and a commitment by centre to work closely with states to re-orient their respective Agricultural Produce Market Committee (APMCs) to provide for establishment of private market yards / private markets. We also see a series of steps such as introduction of soil health cards, setting up of agri-tech infrastructure fund, launch of a technology driven second green revolution including ‘protein revolution’ and greater focus on irrigation. FICCI has advocated many of these measures as these are geared towards improving agri-productivity.

To enhance the capital base of the banks, Jaitley indicated that the same will be raised by increasing the shareholding of the people in a phased manner. This will give a boost to retail investor participation in the stock market. “The budget also provides special impetus to the housing sector which is known to be a propeller of growth. Added focus is also seen on the tourism sector and the Micro Small and Medium Enterprises (MSME) sectors, both of which have a high employment intensity”, said Birla.

Several measures have been announced to boost the infrastructure sector. Prominent amongst these is the setting up of new airports, ports, industrial corridors and an institution to support mainstreaming of PPPPs. Support measures have also been announced to make available long term capital for financing such projects including setting up of Infrastructure Investment Trust (INVITS). The measures to enhance the exemption limit for individual tax-payer from Rs 2 lakh to Rs 2.5 lakh and increase the investment limit under section 80 (C) from Rs 1 lakh to Rs 1.5 lakh will add to the purchasing power of the individuals as well as boost the overall savings level in the economy respectively.