Budget 2017 will bring in 'behavioural shift'

Union Budget 2017 which is set to be announced by Finance Minister Arun Jaitley on February 1, 2017 is likely to focus on demonetisation and ways to drive up consumption demand again. 

In a pre-budget consultation with finance ministry, Rana Kapoor, Managing Director and CEO of Yes Bank on Tuesday said, “FY18 Budget will be pivotel in incentivising a 'behavioral shift' in order to drive clean financialisation of consumers and households.”

He said, “For the upcoming budget, ensuring seamless implementation of goods and service tax (GST) and Bankruptcy code is vital along with the demonetisation drive is a logical precursor to this.”

Thus, the government has done a stellar job this year by introducing vital institution reforms which will have wide economic implications such as removal of distinction between plan and non-plan expenditure, advancement of budget by a month and merger of railways budget with Union budget.

Key recommendations were provided by Kapoor like direct tax incentives for working youth, lowering cost of funds, revamp of FRBM act and centralised data responsibility portal for MSMEs. 

Following four priorities were elaborated by Kapoor for government during this budget.

Direct Tax Incentives on the back of demonetisation – which will be critical for newly generated savings of the working youth and also to boost spending. 

Progressively enable lower cost of funds by 100-150 basis points for both corporate and retail borrowers.

Usher in fiscal responsibility and budget management (FRBM) to revamp fiscal reponsibility guidelines in line with the changing economic and financial order

Create centralized portal (akin to Adhar/USD) for all MSMEs to increase access to timely credit.

Lastly, Rana said, "I am confident that with the right mix of fiscal and monetary policy actions our government, will successfully steer India's economy to the next level of growth in the coming year.”