Comprehensive, yet focused: Keki Mistry

Presenting the Budget 2016-17 would not have been an easy task for the government. The finance minister had to consider a number of factors, including global fragility, volatile financial markets and a 'cocktail' of geopolitical risks. He would have had to find ways to strengthen the rural economy, besides providing capital to public sector banks, One Rank One Pension, Pay Commission recommendations and for infrastructure growth.

Undoubtedly, the finance minister's goal is to ensure that India remains a beacon of hope by being on a growth path that matches its potential.
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The finance minister has adhered to the fiscal consolidation road map, thus, assuaged the fear of the market. As a result, the yields on the 10-year government security have come down from 7.78 per cent to 7.64 per cent after the Budget speech. It also gives the Reserve Bank of India room for rate cuts as there is comfort that the Budget is committed to fiscal discipline and reining in inflationary pressures.

Affordable housing has been a focus area of the current government. Allowing a deduction for additional interest of Rs 50,000 per annum is a positive for middle-class borrowers, especially for those living in Tier II and Tier III cities.

The Budget also announced administrative reforms to resolve tax disputes. The voluntary disclosure scheme will encourage tax evaders to pay a one-time tax. Further, although the fine print has still to be analysed, the new dispute resolution mechanisms are firm steps towards a tax-friendly regime.

Keki Mistry
Vice-chairman & CEO, HDFC