The FY 17 budget’s focus on roads and railways reminds one of the earlier NDA government under Atal Behari Vajpayee, which really set off the road construction revolution in India. The Rs. 55,000 crore for roads and Rs. 19,000 crore under the PM Gram Sadak Yojana may boost the economy by creating demand for everything from cement to steel and capital goods to labour. Together with State share, the total spending on roads is budgeted at Rs. 97,000 crore for 2016-17.
However, the disappointing part of the Budget was in its failure to make allocations for recapitalisation of public sector banks and has stopped with the frugal Rs. 25,000 crore. Here, soft measures such as the setting up of the Bank Boards Bureau, tax breaks to asset reconstruction firms and the promise of stake dilution in some PSBs will hopefully send out the right signals to investors and depositors. But banks clearly needed to hear more on this front.