Auto sector is sure to benefit

COMMENT: Baba Kalyani, chairman & MD, Bharat Forge

The 'big push' idea of the Budget is to create conditions for 10 per cent economic growth. The attempt is to sustain growth momentum while also addressing various socio-economic imperatives. In my view, it is a balanced Budget that aims at inclusive growth.

I am particularly happy with the emphasis that has been placed on stepping up investments in infrastructure, agriculture, urban development, education, health and in the manufacturing sector.

Manufacturing clearly is identified as a key driver of the national economy and I am particularly happy that the automobile and auto component sectors have received greater attention.

Specifically, reduction in excise duty on small cars is welcome and will greatly boost demand for automotive components. I would have liked this reduction to have been applied to a larger section of the automotive industry. The 180 SSI items to be de-reserved will hopefully include some automotive components.

The decision to continue FBT with some rationalisation is clearly based purely on revenue considerations. It will, however, result in higher transaction costs and impact competitiveness of exporters at a time when the Finance Minister's larger vision is to double country's share in world trade to 1.5 per cent by 2008-09.

I would, for the time-being, like to reserve my comments on other provisions, till we are able to examine the Budget documents and assess impact.

As a package, however, I expect the Budget will improve competitiveness of the economy. Is it the right prescription? Only time will tell but I am quite optimistic about the results!