“India is about to take off.”
That was the bold declaration from India’s Finance Minister Arun Jaitley as he delivered his first full-year budget since his party won a resounding victory at the polls last May.
India’s budget is a closely-watched TV event, with pre- and post-game analyses on every TV news channel. Even by those standards, Saturday’s budget generated more interest than in previous years, in part because of soaring expectations on the new government.
Jaitley signaled in his speech that “incremental change” was not enough, as he announced a raft of measures to boost infrastructure and growth.
Among the key announcements, Jaitley promised that a widely anticipated national Goods and Services Tax (GST) would be implemented by April 1, 2016. As CNN has reported, India’s states have a myriad of different taxes, making trading between them a nightmare.
A number of other announcements called for additional government spending in energy and housing. Jaitley announced an increase of $11.3 billion in infrastructure. He also promised a universal social security plan — a vital need for India’s millions of poor who have no access to pensions or health care.
Perhaps the biggest cheer from the stock markets — a special trading session was held Saturday — came when Jaitley announced a cut in the corporate tax rate from 30% to 25%.
But it wasn’t all about spending. Jaitley also announced a new 2% tax of the super rich, and promised a hefty 10 year prison sentence for people caught evading taxes. Avoiding income tax is common in India, with only 3% of Indians filing returns.
On Indian TV channels, scores of analysts began to weigh in on the impacts of the budget.
Tarun Das, who ran India’s Confederation of Indian Industry for 30 years told NDTV that he couldn’t find a negative in Jaitley’s presentation. “It’s a creative, confident budget,” he said. “There’s a lot for a lot of people.”
On the show Headlines Today, another regular commentator, Gurcharan Das, complimented the budget but said it stopped short of detail. Speaking of Jaitley’s boss, India’s Prime Minister Narendra Modi, he said “Modi was elected to control inflation and create jobs. He’s controlled inflation, but he needs to show us how he will create jobs.”
Ahead of Saturday’s budget, India released its annual economic survey on Friday. The data produced by the government showed that India is projected to grow as fast as 8.5% in 2016, making it the fastest growing large economy in the world. The data was calculated according to a new methodology.