Rural surplus to drive growth

The 2004-05 budget will generate disposable income in rural India and lead to a boom in the economy, predicted Rahul Roy, a former president of the Institute of Chartered Accountants of India (ICAI), at the regional council's post-budget meeting here recently.

Roy compared the budget and the objectives of the previous government and the present government.

He said while Atal Behari Vajpayee's Golden Quadrilateral project was a landmark achievement, the focus on rural India was also a landmark in its own right.

"The previous government had adopted a trickle down growth strategy and this government is trying the trickle up growth route" said Roy.

He pointed out that this was the first time that the government had actually presented an "open" budget, which implied that many of the proposals were expected as the government had gone through a process of consultation with various sections of industry and commerce, in a bid to test waters.

The focus on agriculture was by and large commended by the panelists at the discussion.

Industrialist Harshvardhan Neotia said the 7-8 per cent growth was not possible without a five per cent growth in agriculture and hence the focus on agriculture was imperative.

The emphasis on education was also commendable. However, Neotia said, "We will have to see the delivery mechanism."

Expressing concern about the revenue projections, Neotia said, he was sceptical about the success of 40 per cent increase in corporate tax collections.

Biswadip Gupta, managing director of Vesuvius India, said the budget was a marriage between emerging political compulsions and economic imperatives.