S. P. Hinduja, Chairman - Hinduja Group

Pranab Mukherjee has presented a confidence-building Budget of hope and change with focus on all inclusive growth. The fiscal stimulus provided by the Government in the past few months has revived the economic growth and it plans to bring back the economy to the high GDP growth rate of 9% at the earliest.

The Budget has proposed higher allocation of funds for a number of development programmes like NREGS and extension of farmer debt waiver scheme, irrigation projects, for the benefit of common man. Such allocation will fulfil the expectations under the political mandate.

It has been decided to continue the stimuli like reduction in service tax and CENVAT announced in the past few months. This will benefit the automobile, textile and medium & small industries and help to revive the growth.

The mechanism for delivering benefits to the poor is proposed to be improved through Smart Card programme and Universal ID Scheme. Such mechanism will avoid leakages and ensure that the aid reaches the target group in full. While the direct tax proposals are revenue neutral, the indirect tax measures will result in some gain, but the resources generated are not adequate to meet the social and infra spend proposed. This has resulted in more than expected fiscal deficit.

The huge shortfall of resources for achieving 9% growth can be bridged only by making the business environment attractive for foreign/NRI investors and public-private partnership.

The investment-friendly environment can be created by making the sanction process for infrastructure projects more transparent, ensuring Centre-state coordination and simplifying procedures.

Projects should be made available to NRIs and other investors with all approvals and clearances so that no hurdles are created in the course of implementation.

Other sources of funds are enhancing the cap on foreign direct investments in banking, insurance and other industries and divestment of stake in public sector undertaking with a right agenda.

That said, the Budget is positive one that it has not withdrawn the tax concessions to affected industries with its emphasis on common man and infrastructure.