A balancing act: Shikha Sharma

The Union Budget had to manage multiple trade-offs, yet it has succeeded in preserving the fiscal ‘red line’ the finance minister had drawn. The Budget also put more sand on the wheels of the corrective actions taken earlier with a sharpened focus on growth — through measures to encourage investments in manufacturing and infrastructure, with an emphasis on encouraging job creation and employment — even while attempting credible fiscal consolidation. Market sentiments are likely to improve once the deeper implications of the measures are appreciated.

The approach to increasing revenues was also guided by principles of clarity in tax laws and a stable tax regime, which will sustain the improvement in investor sentiment.

Laying to rest doubts on the quality of adjustment in fiscal consolidation, plan expenditure has been increased, while targeting allocations judiciously to select programmes which can leverage infrastructure and manufacturing investments.

Consistent with the focus on financial inclusion, private sector banks have been provided a level playing field with the extension of the 4 per cent interest subvention scheme.  The projected fiscal consolidation might result in some short-term growth sacrifice, but will provide the monetary policy more headroom for easing.

As in every successful initiative, the focus must now be on execution and credible implementation, so that the measures are leveraged to the full for reviving investment and growth, and we can begin to make our own future.

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Shikha Sharma
CEO & MD, Axis Bank