India’s annual budget and goods and services tax

The finance minister’s presentation of India’s annual budget generally draws an extraordinary level of industry and media attention. This is because the budget announces the tax policies, provisions, tax rates and tax concessions for the year, and also serves as a platform to announce policy initiatives impacting investment opportunities in various sectors.

This year’s budget – presented by Arun Jaitley on 10 July – drew an exceptionally high level of interest as it was touted to be the first test of the reform and investment agenda of the recently elected government.

The promise of “acche din” (good days) and a resounding mandate in the elections had led to unrealistic expectations of what would be delivered in this budget. The finance minister would have had to walk on water to fulfil the expectations that had built up. In his speech, Jaitley made the point that one budget could not address everything and systemic changes would have to be made in the next few years to achieve India’s economic aspirations. The challenge for the minister was to balance the unduly high expectations built up pre-budget with the prevailing economic realities, with a view to reshaping investment sentiment both domestically and internationally.

Rohan Shah is the managing partner and Anay Banhatti is a senior associate at Economic Laws Practice. This article is intended for informational purposes and does not constitute a legal opinion or advice.