A growth-oriented and positive Budget: Kotak Mahindra Bank's Shanti Ekambaram

Budget 2015 was presented in the background of macroeconomic stability - lower inflation, stable currency, lower current account deficit. The government thus moved its focus to growth, primarily through enhanced public investment in core infrastructure given the lack of investments by the private sector.

It is overall a positive Budget, which outlined the vision and road map for the next four years across infrastructure investments, tax reforms for corporates and investments, and encouraged the 'Make in India' vision.

The vision of providing basic facilities to every citizen - house, job, education, healthcare, road connectivity by 2022 - was outlined. Farmers and the poor found mention and allocation of resources.

Some key highlights

1. Fiscal consolidation is key. However, the journey to reach there will be slower - three years to achieve 3 per cent fiscal deficit rather than two years. The funds so available will be used towards investment in infrastructure
2.  Government to invest in roads and railways directly, as well as take more risk in PPP projects to kick-start investment in infrastructure
3.  Plug-and-play projects in infrastructure - with all clearances in place - in power, roads and ports
4.  A new bankruptcy code to be introduced for better recovery of loans and in line with global standards
5.  NBFCs to get FI status under SARFESI act - to aid recovery
6.  Reduce cash in the economy - incentives to debit & credit cards.

By providing 62 per cent of divisible tax receipts to states and paving the way for GST, it will be positive for development and growth.

On the tax measures, a very clear outlining of measures for the financial sector  - deferment of GAAR, pass-through status for AIF investments, tax exemption to sponsors on REIT - all of this will facilitate smoother and significant equity investments, which will benefit small and medium enterprises and help sponsors of commercial real estate assets raise funds through REITS.

A roadmap to reduce corporate tax to 25 per cent over four years and rationalisation of exemptions was mentioned - no details were provided however. This will be positive as corporates can now plan for the same.

Overall a positive Budget - with a clear focus on investment in the economy and strict provisions against black money, incentives to middle class to help cover health insurance as well as save for pension.

It will go a long way in building India, increase the tax kitty as well as put more money in hands of people. In the short term, a higher than planned fiscal deficit for next year will perhaps make interest rate cuts slower. However, the growth that is likely to follow higher investments and flow of funds is likely to be significant.

Time for action.

The author is President - Consumer Banking, Kotak Mahindra Bank