11/9/2022 0 Comments Fm editor remove all reserve teams![]() ![]() Understandably, the deadline for meeting a lower targeted fiscal deficit has bee pushed back by a year. It’s little wonder that despite oil price softening, he is unable to bring down total subsidy. Thanks to the urgency to kick-start capital expenditure and the compulsion to appear as a government with a human face, Mr Jaitley is left with no choice but to increase social spending. It should not come as a surprise if two years later the government changes the law to scrap it permanently. GAAR – which caused endless confusion among foreign institutional investors – has been pushed back. Make no mistake: no incentive will be scrapped this year. At this point it’s a statement of intent, though in the right direction. It has promised to remove some of the cobwebs in the tax regime: corporate tax would be lowered over four years while exemptions to businesses would be phased out. Third, and most importantly, the finance minister has shared a medium term-perspective. Perhaps, it’s lesson that the government has learnt from Mr Kejriwal’s stunning victory. Second, while the government is keen to help business and remove hurdles for foreign investors and offshore funds, it remains and shall remain pro-poor. There aren’t too many companies with strong balance-sheets and bankable funding proposals to take up large infrastructure projects in a meaningful way. First, the investment cycle has to restart with public investment. Three messages emerge loud and clear from Mr Jaitley’s speech. ![]()
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