The budget presents a transformative agenda with clear-cut focus on initiatives for farmers, rural sector and infrastructure development. However, it negatively impacts the automobile industry. We are disappointed that the industry's demand on reducing excise duty has not been addressed. On the contrary, one per cent Infra cess on Petrol, CNG, LPG cars, 2.5 per cent on small diesel cars and four per cent on bigger diesel cars and SUVs has been added which will further affect the price and consequently demand. Also, we need to evaluate the impact of extra tax levy of one per cent on purchase of cars above Rs 10 lakh. Government has not announced any positive initiatives for the industry which contributes so heavily to the manufacturing sector and overall economy.
However, we are pleased to see the increase in expenditure on infrastructural development with specific announcements like approval of 10,000km of national highways and total investment in road sector at Rs 97,000 crore in FY17 that should help in people getting better road infrastructure.
The FM has announced many measures which will support the common man including health protection scheme for health cover up to Rs 1 lakh per family, raising personal I-T house rent exemption to Rs 60,000 from Rs 24,000 per year, first home buyers getting an additional deduction on interest of Rs 50,000, provided value of the house does not exceed Rs 50 lakh; and ceiling of tax rebate for tax payers with up to Rs 5 lakh annual income to be raised to Rs 5,000 from Rs 2,000. This should help the common man in increased savings. Also the target of 100 per cent rural electrification by May, 2018 is a great step in the path of development.