Deepak Parekh , Chairman, HDFC

I think market has not understood the budget; I am reasonably happy with the budget. I think it's given a roadmap and the Finance Minister very rightly said that one budget is not cure for all problems. He is talking of a roadmap of at least getting back to the 9% gross domestic product (GDP) growth. He has put much more emphasis on infrastructure. He is making sure that access to money will be available through India Infrastructure Finance Company Ltd (IIFCL), there is much more allocation for urban infrastructure, there is larger allocation for highway projects, for rural housing, for accelerated power programme, overall I am very happy with the budget.

The market expected maybe a reduction of corporate tax which has not happened, the surcharge on corporate tax is not been removed. The Finance Minister was very silent on foreign direct investment but one must understand that he mentioned the role of private sector; he mentioned the role of private finance. I don’t think budget is an area where insurance liberalisation is going to be discussed. Importance of foreign capital was mentioned and in their normal course they will look at increasing the limits on certain sectors like insurance. I don't think it's a no-no for insurance or for retail; these are separate issues, these are not related to balancing the books of the government or announcing it in the budget. Private capital is important, disinvestment will happen, government needs more money, they will not go below 51% but in most public sectors one will see disinvestment coming down, government holding in public sector undertaking (PSU) coming down to 51%. So I do not see any reason for being negative.

I am not at all disappointed about that because for instance the deduction allowed today is 1,50,000 of interest paid with a low interest rate one can borrow up to Rs 18 lakh and get the entire interest deductible. I don’t think we need higher limits for exemption. The other point is there is also a Rs 1,00,000 deduction on principal amount under 80C if one do not have insurance policies or other benefits; its clubbed with other benefits. Finance minister has stressed on rural housing by allocating more money and by strengthening the National Housing Bank and I think we need to divert our attention to rural housing. The way urban housing is been impacted in the budget is by more allocation, an increase of allocation of 80% on Jawaharlal Nehru National Urban Renewal Mission (JNNURM); JNNURM is relating to urban infrastructure; predominantly slums and housing. So States will get more funds from the Centre under the scheme which will help the slum rehabilitation programmes. So I am not at all disappointed on the housing, I think the expectation in the market was too much that the 1.5 lakh will become 2.5 lakh. I don’t think it was necessary and I am very glad that it was left untouched.

I don’t think FDI in insurance is a budget matter. As he mentioned private sector he could have mentioned private and international sector. We want large amount of investments in infrastructure and we want both the private sector and the foreign sector to play an important part. He did not say that but I think we meant it that we want foreign capital in our infrastructure; we want foreign capital in India. There is a committee which has been set up, a parliamentary committee to look at insurance. So unless that committee gives and some new members joined after the election results, so they have to give a report to the government. Once they give the report to parliament then the finance minister will take that matter of increasing the FDI to 49% that process has to be followed. I never expected it in this budget and I don’t think we should be disappointed that foreign investors have been sidelined or we don’t want foreign investors into India. I don’t think we should jump to that conclusion.