Post Budget Views of Mr. Ramesh Bawa, MD & CEO, IL&FS Financial Services

“This year’s Budget had built up a lot of expectations over the last few months across all the sectors of the industry awaiting for the announcement of impressive reforms.. I personally feel that we do not need a Grand Plan, rather India needs a solid and continuing plan. Although, this budget provides a good direction towards simplifying the procedures for achieving this goal there seems to be a substantial scope available to explore much more measures for the remarkable reforms.

The vision to achieve a progressive double digit growth and maintain a graded fiscal deficit target of 3% by FY 17-18 is laudable. This sets a clear path for combining the twin challenges of containing fiscal deficit and manning the existing challenges in the business environment. The provision of access to enforcement rights under SARFAESI Act establishes a long awaited parity for NBFCs with Banks and will improve their ability for enforcement actions and result in revival of stalled projects. On the changes relating to pass through status for REITs and Infra Investment Funds, I think this should give a impetus in helping Infrastructure and Real Estate sectors to raise funds from the capital markets. 

 

With respect to the Infrastructure sector, the Budget has laid a clear road map for development of various infrastructure initiatives – Redressal framework for approvals and pending disputes, new Road development plan of 1 lakh kms, a push for Renewable energy, large power projects in a “plug & plan” mode, corporatisation of Port Trusts, Innovative ideas relating to urban development initiatives like the DMIC & International Finance Centre. The infrastructure development agenda also seems to be complemented by several innovative financial initiatives including a National Investment & Infra Fund, Tax free Infra Bonds, Bank Bureau Boards, cess to fund renewable energies and ideas to channelize savings.

The “revisiting and revitalising” of the PPP format through an upping of sovereign support to the risks in the infrastructure PPPs will be an additional booster. Further an innovative idea of “plug and plan” into UMPP projects will see a revival in the power sector, as well. These measures will be helpful in bringing interest from investors, both domestic & international.

Overall, I feel it is a balanced budget. I think the budget’s theme is to provide long term clarity from an Investor and Business confidence perspective.  This Budget seems to be a good start towards the economic development agenda of the Government.”