The Union Budget has been presented in the backdrop of continued economic health and stability and it provided a real opportunity to accelerate economic growth. The FM stayed on course with the programmes he had initiated earlier and reiterated focus on social spending and infrastructure development - which is critical to sustaining economic growth and maintaining stability. The focus remained on the rural sector and communities, which is understandable given the political environment. He also continued to implement various other fiscal and tax initiatives that will support growth. Limiting the fiscal deficit to 4.1% is a noticeable achievement and estimating a future reduction to 3.8% in the current year is even more encouraging. The GDP growth at over 8% is heartening and keeping in view the current economic sentiments, it appears that this will be maintained going forward. Against the backdrop of increasing credit expansion there is a need to mobilise resources by the banking sector. The Budget had very little to offer in that direction, other than offering tax concessions on bank deposits of over 5 years. Limited emphasis on the financial services sector was seen, but plans to create a single corporate bond market, enhance FII investment in government and corporate paper are welcome steps.
—The author is MD & CEO, Bank of America, India
