Budget 2017: Infrastructure, SMEs, rural economy should be the key thrust area

By Umesh Revankar, MD, Shriram Transport Finance

With successful implementation of demonetisation, it is that time of the year wherein Union Government’s fourth and most awaited budget would be announced. The key thrust area of the Budget 2017-18 should be Infrastructure, SMEs and Rural economy.    
 
The overall economic development gets a push through faster and efficient connectivity. The major infrastructure focus should be on ports, railways and roads to reduce the logistics cost which is probably one of the highest in the world for movement of goods.  Further, the government should arrange easy financing policies for infrastructure companies.  
   
Power sector is one of the critical infrastructures to strengthen the manufacturing base. Thus, Budget should encourage investment in power sector.There should be increased focus on renewable energy by giving tax breaks and subsidies.
 
Additionally, today the rural India is playing a very important role in influencing the manufacturers to increase their scale and expanding their capacities. The manufacturing activity especially the SMEs segment which is rural based needs further drive. With GST likely to be implemented in next fiscal year and the ease of doing business has to become main agenda and the state governments should be encouraged by providing further funds based on ranking on this count. This will not only help to create more employment opportunity but also increase our exports.
 
In the budget FY 2015-16, MUDRA (Micro Units Development & Refinance Agency Ltd) was set up as a subsidiary of SIDBI for refinancing of loans by banks, NBFCs and microfinance companies. The Budget should bring the refinancing through MUDRA to the banks and NBFCs at par (and if not all NBFCs, atleast the good rated ones).  
 
The government should widen the scope of MGNREGA scheme by including toilets, building schoolrooms, drinking water, tank, road etc. This will enable to increase the rural productivity and also develop quality infra. Also, by building their own infrastructure, feeling of ownership and pride will also develop among the local people. It will also support earnings for the poor that helps local education of their children, and also creates awareness about cleanliness by the usage of toilets, giving the ‘Swach Bharat’ campaign a very big boost. Government has to increase social spending on education, health care and mass transportation.
 
Post demonetisation and government drive to promote cashless transactions; the budget should announce policies wherein all the government companies and public utilities don’t charge any taxes on the payments done through digital platforms.

The opinions expressed within this article are the personal opinions of the author.