Rating a Budget is always a challenging and hazardous task; and a lot depends on our expectations. This year the spectrum of expectation from the Budget was very wide. Some feared it will be extremely populist being the last one before general elections, while others expected it to be a disciplined one with focus on growth. I feel the Finance Minister has delivered a pragmatic, sensible and growth-oriented budget.
Let me first look at what are the positives. The strong statement on the need to attract foreign investment is welcome. That shows how serious the Government is about reviving growth as well addressing the current account deficit. The commitment on fiscal deficit has been kept and this has been done without sacrificing necessary allocations. Subsidies have been pruned by 10 per cent for FY 13-14. I hope this figure will be maintained, because it will certainly entail raising fuel and fertiliser prices.
Market borrowings have been kept in check with a modest increase of only 4 per cent for 2013-24. This is an important step toward long term fiscal heath.
Infrastructure has been given a boost. The creation of infrastructure debt funds and raising money through tax free bonds will certainly give an impetus. This along with quick implementation of industrial corridors will drive investments into manufacturing. The cabinet committee on investment will be a key facilitator, and it is hoped that we see a start to some of the stalled projects. PPP in coal is timely and should be implemented expeditiously. The allowance of 15 per cent for investments above Rs 100 crore will help in kickstarting investment.
I particularly welcome two steps on the savings front. The higher interest deduction of Rs 1 lakh interest will encourage housing and will have positive cascading effect on employment. The introduction of inflation index bonds will bring a lot of relief to the conservative investors who had found that real interest earnings after inflation adjustment were close to zero. It is hoped that citizens will be less inclined to invest in gold as a hedge against inflation.
The disinvestment plan of raising Rs 56,000 crore is ambitious and I hope it will be implemented. Sale to international inventors will kill two birds with one stone and address both the deficits.
The Budget’s emphasis on creating jobs, skilling the youth and empowering women will have economic and social benefits. The initiatives announced regarding agriculture sector are in the right direction. The total outlay of agriculture sector is raised by 22 per cent to Rs 27,049 crore in the Budget. Of this Rs 3,415 crore is allocated to research in the agriculture. The proposed increase in agriculture credit by 22 per cent to Rs 7 lakh crore will provide the necessary support to the Indian farmer.
Over all, the Budget is inclusive and growth-oriented.
(The writer is Chairman and Senior Managing Director, DCM Shriram Consolidated Ltd and Vice-President, CII.)