Budget Reaction by Dr D Dhanuraj, Chairman, Centre for Public Policy Research

“This is a budget for rural India through which the government has tried to reach out to every section of the rural population. The BJP is trying to overcome the allegations levelled against it of being a pro-elite, pro-rich government. Though the proposals are significant, it is to be seen how much of them will be materialised, as it requires some structural changes at the governance level. With hardly any change in the tax structure, the government has not been able to cheer up the middle class.”
“Though FM Arun Jaitley had announced that he would reduce the corporate tax from 30% to 25% by 2019, he has not kept his promise this time too. Instead, the corporate tax rate of companies with a turnover of more than Rs 250 crore has been cut down to 25%. These companies include mostly Micro Small & Medium Enterprises (MSMEs) that make up nearly 10–12% in terms of market value creation in India. These MSMEs are dependent on the ancillary services of corporate companies for their existence and growth. However, MSMEs provide employment to nearly 80% of the country’s population. Hence, this is definitely a step towards wooing the vote bank. In not keeping with the global trend of cutting down corporate tax rates, India may risk holding off foreign investments further.”