While the Budget has perhaps ensured that the taxation pain is almost negligible across sectors, it has at the same time attempted to give a big fillip to agriculture and infrastructure, in addition to statement of intent on the long-term growth in manufacturing.

The provision towards increase in credit growth from Rs 375,000 crore to Rs 475,000 crore, retaining the interest on short-term crop loan at 7 per cent with subvention of 3 per cent towards prompt repayment as compared to 2 per cent earlier, making the effective rate of interest to 4 per cent, recognising the cold chain, post-harvesting storage as well as fertiliser under infrastructure sub sector, and the creation of additional storage capacity are all steps in the right direction.

Similarly, the increase in the investment in FII limit towards infrastructure from $5 billion to $25 billion, issuance of tax free bonds of Rs 30,000 crore would not only enable infrastructure to grow, but hopefully deepen the bond market in the long run. What are the concern areas in the Budget?

Revenue Deficit

The Government has successfully managed the revenue deficit in the past several years by resorting to borrowings, which only means that we are mortgaging the future for the present.

In addition, this year for the first time, the Government has managed to bring down the revenue deficit from 2.30 per cent to 1.80 per cent by recognising the transfers to States and other development expenditure amount of Rs 1.47 lakh crore (Rs 90,792 crore in 2010-11).

One does not know whether this money has really been used to create any capital expenditure and if so, the nature of such asset created and the use of the same. In any case almost 40 per cent of the borrowings projected are towards bridging the revenue deficit which is not definitely good.

Issues in Agriculture

The Government has allocated a meagre Rs 300 crore to promote pulses in 60,000 villages for increasing crop productivity. While the Finance Minister has acknowledged the fact that our domestic production of edible oil meets only 50 per cent of the demand, the Budget is providing a meagre Rs 300 crore.

There has been a significant increase of 20 per cent towards allocation for Bharat Nirman Programme from Rs 48,000 crore to Rs 58,000 crore. But one does not have a progress report on this activity such as extra irrigation capacity created, number of km roads laid, power connectivity added in the villages etc.

Black Money

Certain policy level statement has been made with regard to curbing black money. However, we do not find any specific concrete steps announced to curb this menace.

If declaration of both net dealer price and MRP on all products'could help to at least contain the menace of black money, the same should be tried wherever feasible.

One of the significant components for generation is through real estate transactions.

Central Government should work with State Governments and ensure that the guideline values of the various places are closely aligned to market value and simultaneously reduce the stamp duty significantly, so that the common man is not impacted.

Subsidy

While the announcement of direct cash subsidy to the ultimate consumer is a laudable objective, it is extremely important that if this objective has to be achieved the rural banking is taken to its logical conclusion and all the eligible people are made to open accounts before March 2012.

Finally if the governance has to really improve, the Government, like the Reserve Bank of India, should come out with the performance report on a quarterly basis.

It is also important to review once in a quarter whether the policy measures such as increase in FII limits for investment in infrastructure, starting of mega food parks, and inclusion of certain sectors in infrastructure segment are giving the desired result and take corrective action wherever required.

(The author is Chief Financial Officer, TAFE).

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