NEW DELHI: In anticipation of the state elections, the Budget was expected to be both welfare-biased and easy on taxation. It qualified on both these counts. However, the report card on Make In India, GDP and the consequences of demonetisation on the economy did not find much mention in the Budget speech.
The merger of the Railway Budget with the General Budget should enable the railways to raise resources by increasing passenger fares without subjecting it to vote politics. A rail regulator promised in the last three Rail Budgets should have been appointed. In the absence of a direct parliamentary supervision, the regulator will become more relevant for evaluation and regulation of commercial policies of Indian Railways based on criteria of cost, requirement, feasibility and efficiency. The Passenger Safety Fund will help the railways make its asset base more modern and reliable.
The idea of an integrated transport policy and multi-modal transport solutions for door-to-door service through collaboration with the private sector is laudable. However, the railways’ performance in public-private participation has not been very impressive.
Higher allocation to welfare schemes, higher defence allocation, lower fiscal and revenue deficit, extension of MAT credit window and lower rate of personal and SME taxation indicates welfare, fiscal prudence and somewhat populist posture of the government. The lower tax rates are welcome provided that those help increase the tax base