Budget is remarkably consistent in macro consolidation, leveraging on tech-driven initiatives

Source: Sourcing Hardware

Sanjay Phadke, EVP-Platform & FI business head, Vayana Network

“Interim budget presented by the newly appointed finance minister met with stiff critique from many sections of society. However, when one filters out the pre-election giveaways, the budget is remarkably consistent in both macro consolidation, as well as leveraging on recent technology-driven initiatives. The farm income scheme, real estate-related measures and tax exemption below Rs. 5 lakhs are decidedly populist, and somewhat along expected lines given elections are a few months away. But the loss to the exchequer from both is manageable. Therein lies the beauty of this budget, as it continues the path towards fiscal consolidation and minimising borrowings without diluting mammoth expenditure.

The key has been increasing non-debt revenues, both in terms of one-offs (such as disinvestment, dividends, etc.) as well as healthily increasing tax revenues on flat to lower tax rates. One could argue that improving tax / GDP ratio is a huge contributor to remaking India. Improving the use of technology and data are responsible for a wider tax base and increasing compliance. While GST and demonetisation were huge temporary speed breakers, the momentum is coming back into the system. And now with 2% reduction in interest rates and making it mandatory to pay MSMEs on time, the government is rewarding good corporate citizens. Both these will go a long way for Vayana Network too as our endeavour is to streamline working capital for small businesses in supply chain and tax compliance. While ultimately the execution on the ground is key, one feels cautiously optimistic about this budget.”