The Budget was a clever and balanced attempt at addressing the issues the Indian economy is facing. The most important feature I think was that it was growth oriented. The increase in the income-tax slabs as well as the increases in allocation to various rural development schemes will have a very positive effect on demand creation and thus on production.
The strong emphasis on encouraging private sector research & development was a very welcome feature that will add considerably to the long-term strength of the economy. Other welcome features were the increased allocation for renewable energy and the continuation of interest subvention for affordable housing.
I was a little disappointed that the finance minister has not given a firm and early date for the implementation of the goods and services tax (GST). He only said that he would attempt to introduce it by April 2011.
Introduction of GST will be the single most important reform for the Indian economy. It will add considerably to GDP growth, reduce consumer prices leading to greater consumption and thus production, leading to a strong virtuous cycle.
I thought that the increase in taxation on tobacco and petroleum products are moves in the right direction.