I have not read the fine print yet but from what I have heard so far, this is a good intentioned budget but translation of the intention to result will determine the future growth. For infrastructure creation, which is the crying need for the country regretfully, the Budget has not done enough, even though the budget provides some impetus to power and automobile sectors. The Budget would have received better ratings if it had more focus and commitment on infrastructure front. There seems to be nothing for ports, airports, urban housing, construction sectors etc. except for some. These are critical for the country to leap frog into the big league in global arena. Infrastructure deficit is growing at a rapid speed and needs to be addressed on war footing.

One of the positive features is that the Budget provides stability and continuity which will enable the sustenance of the current momentum. The growth of manufacturing sector should have been set at around 15% as opposed to below 10% to tap the full potential of the Indian manufacturing sector.

Focus on education both primary and higher education are welcome steps. Setting up of 16 Central Universities, 3 IITs and 2 IISERs will go a long way in creating the talent pool of the country which is critical resource for future growth. These institutions should be setup quickly on a global scale with world class facilities and research.

The budget is marginally positive for steel sector. Reduction in the peak excise duty and reduction of duties on project import would have positive impact on steel and other capital oriented industries. Reduction of customs duty on steel-melting scrap will not have any impact on Tata Steel.

While all of us have full sympathy with our marginal farmers and are indebted to them for providing food, we need to be careful that the move to waive the loans should not distort the discipline in the credit system. Farmers need to be helped through providing long-term structural solutions including expanded network of rural and microfinance.

The Hon'ble Finance Minister has referred to Steel Industry in India as oligopolistic, but I wish to mention that the total steel production of India is less than half of the largest steel producer in the world. Size of each player in India is heavily sub-optimal even now. To meet the future steel demand of a growing nation like India, we need new capacities of global scale and state of the art technology. To facilitate setting up of new investments, the Government needs to provide a launching pad for investments in steel production by removing the existing hurdles.

With the golden quadrilateral project almost completed, the Government should initiate similar projects for development of roads, ports and airports. This would lead to the development of automobile, cement and steel industries and promote large scale industrialisation and create employment opportunities. The budget could have given more focus on urbanisation by promoting measures that would lead to setting large integrated townships in the urban and semi-urban areas.

The Finance Minister needs to be complemented for containing the fiscal and revenue deficit. Containing inflation remains a challenge.

Considering the higher collection of direct tax, I would have expected relief from the surcharge which was introduced as a temporary measure. Also I expected more rationalisation and reduction in the Fringe Benefit Tax. The Government's commitment to introduce GST by 2010 is welcome and this will have positive impact on industry and consumers, when introduced.



Rating : Not Rated