Budgets are judged through the prism of expectations. Journalists, columnist, economists and analysts, corporates, tax planners, tax payers, each has a different starting point and consequently a different outlook. Add to that the hope it will be big bang, without a consensus on what exactly constitutes big bang. The finance minister is expected to meet each one's expectations - no matter how different these are.
One 'big bang' happened the week this Budget was presented. The acceptance of the recommendations of the Finance Commission, transferring up to 42 per cent of the resources, will change the equation between the Centre and states.
Coming to the Budget, it has a number of new announcements - some of which can be considered path-breaking. The idea of a social security network with pension and insurance on the back of the Jan Dhan will have far-reaching implications, a monetary policy agreement with the Reserve Bank, the provisions regarding undeclared money in offshore accounts, the schemes for monetisation of gold loan, the decision to have a bankruptcy code, and to launch the Mudra Bank, to list just a few.
Then there is the attempt at ease of doing business - the announcement on the GST timeline, combining FDI and FIPB limits, or permanent establishment norms rationalised. Setting up the expert committee to prepare a draft legislation where the need for multiple prior permission can be replaced by a pre-existing regulatory mechanism and the autonomous bank board bureau, the movement of the public debt office, the merger between SEBI and the FMC. Again it's not an exhaustive list.
We then have the usual tweaks that finance ministers labour over - the phased reduction in income tax to 25 per cent, the deferral of DTC, increase in excise duties, new schemes and projects including numerous national institutions in various states, the spend on UNESCO heritage sites, change transport allowance.
If all this was not exhausting enough, there is huge spend on building roads, and low-cost housing, the support to the railway Budget, and setting up UMPPs to jump-start investment. Add to this tripling divestment targets from what was actually achieved this year, leaves everyone asking "How will the government implement all this?"
It is difficult to take a call on the success of its implementation on the evening the Budget is presented. And as has been said on countless occasions, as much can be done outside of the Budget as in the Budget. Having said so, I believe this Budget will definitely change the economy's growth trajectory.
The author is the founder and MD, Institutional Investor Advisory Services India Limited