An Outstanding Budget With Something For Everyone

The interim budget announcement by the government on Thursday was way better than expected in an election year.

Finance Minister Nirmala Sitharaman announced a budget that brings in something for everyone. Whether you are a farmer, a young person, or running a startup, you have something to look forward to.

The government's push for higher capital expenditure over a large base points to the fact that the focus on growth continues.

The government is also looking at helping the average Indian to monetise solar panels. As part of its announcements, the government stated that about 1 crore households can get up to 300 units of free electricity every month. This will ensure savings of up to Rs 15,000–18,000 for each household each year. Moreover, these families can also sell excess power to distribution companies.

Such moves put money in the hands of middle-class families. These measures would result in a boost in consumption and therefore demand for goods and services, which, in turn, would lead to increased production and, consequently, lead to more job creation.

The announcement to build 2 crore new houses for the rural poor addresses some of the financially weaker members of society. Housing has a multiplier effect on the economy, apart from helping the needy. There is a huge amount of job creation, both directly and indirectly, through industries like cement, steel, paint, power and other ancillary industries associated with construction.

Tax collections have remained buoyant as Indians have benefited from the reduction in personal and corporate tax rates. This proves the point that a reduction in tax rates not only results in improved sentiments but also increases compliance and the motivation to increase income.

The government's focus on foreign direct investment and the recent inclusion of Indian government bonds in JPMorgan's emerging markets index will improve market liquidity.

The continued effort to remain on the fiscal consolidation path is the biggest highlight in my mind. This ensures that growth is achieved at the right cost and the economy can take full advantage of this growth.

Keki Mistry is former Vice Chairman and CEO of Housing Development Finance Corp.

The views expressed here are those of the author, and do not necessarily represent the views of NDTV Profit or its editorial team.