Sensitive to the middle class: Rakesh Jhunjhunwala

UNION BUDGET 2005-06: COMMENTS

One cannot have expected a better Budget in the context of the current political dilemmas. Kudos to the Hon Finance Minister for a Progressive, Responsible and Sensitive Budget.

This Budget will ensure India continues firmly on the growth track - driven by increased Capex, increased Consumption and increased Competitiveness.

In the backdrop of nearly 7% GDP growth (even with poor monsoons), Savings/GDP of 28%, interesting FII flows and Non-food credit growth; it was a golden opportunity to present a revolutionary Budget that can push India into the next orbit of growth.

And, the Hon Finance Minister did not disappoint. The Progressiveness of the Budget was visible in the thrust on Employment growth, Rural impetus and Infrastructure development. The SPV formation and productive use of Forex reserves are path-breaking steps.

The de-bottlenecking of personal income tax and banking regulations will make the economic environment more conducive. The restructuring of the petroleum levies, promise of a separate banking sector policy by the RBI, and encouragement of capital markets including debt markets and OTC derivatives were vindications of the forward looking mindset of the Finance Minister.

Re-affirmation of the VAT implementation schedule and intent of a GST demonstrates a resolve of the Finance Minister and the Government. Above all, it will accelerate the virtuous cycle of capex, consumption and competitiveness.

It was a Responsible Budget - the Hon Finance Minister faced the challenges on the front foot. Packages for Tsunami rehabilitation, Co-operative Banks, Sick Sugar mills, Defined Contribution for Pensions and the 'Bharat Nirmaan' initiative for balancing the Rural-Urban divide are very Responsible acts by the Hon Finance Minister.

Being on target for the FRBM roadmap, and implementation of the TFC recommendations show his commitment to follow-through on intent statements.

The Sensitiveness of the Budget was reflected in the concern for Tsunami victims, SC/ST, Women and Senior Citizens and the concrete action points to address them and their interests.

The Personal tax rationalization and the urban infrastructure initiative show sensitiveness towards the burgeoning urban middle class across cities.