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It is a vote-catching Budget by the UPA government just a few months ahead of the general elections. Good news on the economic front has been liberally sprinkled — a cautious word about gross domestic product (GDP) growth, containment of fiscal deficit, and government expenditure, the number of power plants as well as nuclear plants, airports under construction and so on.
The government has given a boost to the manufacturing sector by cutting excise duty on automobiles and capital goods. But the move has come a tad too late. Industry has been waiting for some relief for three years at least. Why the government did not focus on the manufacturing sector earlier is difficult to guess.
While there is no action on the ground on big reforms such as Direct Taxes Code (DTC) and Goods and Services Tax (GST) among others, Finance Minister P Chidambaram did talk in detail about why these could not be implemented and also what should be the road ahead for them. By announcing one rank one pay pension schemes in the armed forces, and a moratorium on interest on student loans taken before March 31, 2009, the finance minister has clearly sought to win their support.
The minister has rolled over fuel subsidies to the next year to keep fiscal deficit under check.
The construction and housing sectors were conspicuous by their absence in the FM’s speech. The treatment to real estate investment trusts (Reits) like mutual funds has not been spelt out. So, I would think there is plenty left for the main Budget once the new government takes charge this summer, I am afraid.
India cannot take shelter under the argument of global factors any longer. Nations like India will perhaps have to set the agenda for high-spiral growth if the aspirations of all Indians, especially the large young population, have to form the pillar of support of the government... any government.
Rajeev Talwar, Group Executive Director, DLF
