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Tamil Nadu Chief Minister J Jayalalithaa today said that the Union Budget is forward looking budget and will lead to economic revival and ensure that further incentives to growth can be afforded in the next two to three years.
She said that Budget reflects the seriousness with which the new Government has set about the task of addressing the challenge of revival of growth and improving the macro-economic situation of the country.
“It is a very responsible document which has placed fiscal prudence at the fore-front and at the same time addresses the heightened expectations from the new Government. It is a forward looking exercise in positivity.
The Budget has commenced in right earnest the process of tackling the problems and issues head on. Many of the announcements made in the President’s Address have also been given concrete shape in the Budget”.
She added, a clear fiscal road map to contain the fiscal deficit has been provided. The setting up of the Expenditure Management Commission is a welcome development and hope that the Commission will address the issue of expenditure management in the appropriate socio-economic context of the country and keeping the welfare objectives in view.
“I expect there will be opportunities to voice our concerns regarding ensuring the food and fuel security of the poor and weaker sections before the Commission,” said the Chief Minister, who welcomed the assurance of the Finance Minister that he will be “more than fair” to the States in addressing their concerns regarding the implementation of GST, relating to both fiscal autonomy and compensation of revenue loss issues. An accommodative and constructive approach from the Central Government could pave the way to enacting the necessary legislation on GST.
“The proposals relating to permitting FDI need to be approached with caution. In particular, the proposal to permit manufacturing entities set up with FDI to sell their products through retail, including e-commerce platforms, should not extend to permitting FDI in retail.,” said the Chief Minister.
She expressed her Finance Minister will consult all stakeholders including State Governments before legislating the Indian Finance Code based on the recommendations of the FSLRC. The States are rightly concerned with some of the recommendations relating to co-operative banks, micro-finance institutions and prevention of financial scams and scandals.
Given the constraints, the Finance Minister has provided modest taxation relief on personal income tax by raising the exemption limit to Rs 2,50,000 which will benefit the working class. The increase in Section 80 C limit to Rs.1,50,000 is a welcome measure to enhance financial savings.
The other Direct and Indirect tax proposals are corrections of distortions and inverted duty structures which would help revival of growth in domestic manufacturing. The incentives for solar power and wind power equipment manufacture will also be of relevance to Tamil Nadu which is a leader in new and renewable energy.
The increase in taxation of tobacco and tobacco products is critical not only from a revenue perspective, but also in addressing public health concerns.
