The first Budget of Modi 2.0 government has laid huge emphasis on investment and consumption to realise the dream of `New India` making it a $ 5 trillion economy in the next few years, but mobilising funds remains a challenge for it in the wake of global headwinds and domestic slowdown. "Our economy was at approximately $ 1.85 trillion when we formed the government in 2014. Within 5 years it has reached $ 2.7 trillion. It is well within our capacity to reach the $ 5 trillion target in the next few years", Finance Minister Nirmala Sitharaman said in her maiden Budget speech.

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The Budget relies heavily on private investment to build infrastructure that would cost Rs 100 lakh crore over the next five years, rev up manufacturing, boost exports and create more jobs. It has proposed to further open various sectors for FDI and relax rules for other foreign and NRI investments into the country.

"There are several commendable measures on the capital market front to attract the FPIs and also further easing of the FDI norms in insurance intermediation and relaxing the local sourcing requirements in single brand retail to cheer the private sector. The outcome will, however, depend on how the private sector reacts to the proposals and realisation of the investments," said Ranen Banerjee, Leader (Public Finance and Economics), PwC India.

The Budget has proposed to mobilise funds by offering to divest stake in more public sector companies and issuing sovereign bonds overseas. For finding ways to provide long-term financing to infrastructure sector, the Finance Minister has proposed an expert panel that will give suggestions.

Given the commitment to stick to fiscal deficit (as a percentage of GDP) target, 10 basis point lower than 3.4 per cent announced in the Interim Budget, the task to arrange funds seems even more challenging.

The government hopes a massive fund influx from the Reserve Bank of India as dividend in 2019-20. Senior government official have said that around Rs 90,000 crore is expected to come from the central bank in this fiscal. But given the massive fund needs, this may not be enough. Lower than expected GST collection has already been a big disappointment in FY19.

The Budget has, however, sought to fire all engines to revive private investment and boost consumption offering a slew of tax concessions to companies, raise public spending for infrastructure and ensure credit flow for business expansion.

In line with prescriptions given in the Economic Survey, the Minister stressed private sector-led investment, jobs, exports and consumption.

Besides proposing to relax various rules for foreign and NRI investment into the country, Sitharaman came out with out-of-box idea to create a `Social Stock Exchange` for listing social enterprises and voluntary organisations. The move is expected to help social firms raise funds and promote governance.

The Budget has proposed opening FDI floodgates in aviation, insurance intermediary, animation and media. India`s FDI inflows in 2018-19 remained strong at $ 64.375 billion marking a 6% growth over the previous year.

Sitharaman said that FDI inflows into India have remained robust despite global headwinds.

Further, the Union Budget has attempted to keep consumption level robust by taking much-needed step to tackle crisis in the shadow banking sector. The Budget 2019-20 proposed that government will give one-time six-month credit guarantee for the purchase of assets of high rated NBFCs up to 1 lakh crore. The move is set to ensure flow of capital for well-performing NBFCs.

In order to boost credit, the Finance Minister proposed to provide Rs 70,000 crore to public sector banks.

In a major tax relief for companies with annual turnover of up to Rs 400 crore, Sitharaman proposed to lower corporate tax for them to 25 per cent from 30 per cent now. Currently, the lower corporate tax is paid by companies with annual revenue of Rs 250 crore.

Further, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.

The housing sector, one of the key job creators, also stands to gain from the Budget. Joint development and concession mechanisms would be used for public infrastructure and affordable housing on land parcels held by the Central Government and CPSEs.

Additional deduction up to Rs 1.5 lakhs for interest paid on loans borrowed up to March 31, 2020 for purchase of house valued up to Rs 45 lakh. This will result in overall benefit of around Rs 7 lakh over loan period of 15 years," the Minister said.

The Budget has proposed to upgrade 125,000 km of rural roads and `Housing for All` under PMGSY-III in 5 years with an outlay of more than 80,000 crore providing impetus to the rural economy.

"The focus in the Budget on the rural economy is important because more than 65% of Indians reside in the countryside," said Ajay S. Shriram, Chairman & Senior Managing Director, DCM Shriram and formerly CII President.