When Finance Minister Arun Jaitley released the 2016 Union
Budget on February 29, the response was mostly positive. The budget aims to stick
to the 3.5 percent fiscal deficit target, addresses pressing social and
infrastructural needs, and, for the most part, uses reasonable assumptions to
forecast India’s growth over the next three years. The Modi government has
consistently focused on increased ease of business, opening markets to foreign
investment, building India’s industrial sector, and improving transparency in
taxation and regulation. While this budget delivered more on rural and
infrastructure spending, it certainly includes some business elements that are
worth exploring in detail.
Abhijit Joshi is the Founding Partner of Veritas Legal. He
was the senior partner and chief executive officer (CEO) at AZB & Partners
until November 2104. He has been involved in some of the major landmark deals,
such as the Rs 5,150 crore Tech Mahindra - Satyam Computer Services merger, Usd
2.6 billion Tata -Docomo transaction among many others.
“The Union Budget 2016-17 is well balanced and progressive.
Focus on critical areas such as development of infrastruture and skill
development alongwith measures such as job creation are definitely in the right
direction. Reduced corporate tax for SMEs along with simplified tax regime will
help augment the investment environment in our country.
Finance Minister announced reducing litigation and providing
certainty in taxation is in line with the government objective of reducing the
impediments and promoting ease of doing business. This also shows government’s
commitment towards reduction of black money from the economy. The fiscal
incentives for start-ups and facilitating fund raising through Fund of Funds
will create an entrepreneur culture on one side and more risk taking investors
on the other side. We hope that intention and implementation move seamlessly
going forward. Overall a positive budget aimed at promoting inclusive growth in
the country.”