The Union Budget presented for 2010-11 is a pragmatic one as it attempts to address some pressing issues of the economy within the strict contours of managing the fiscal deficit. The expenditure outlays are well targeted, especially at agriculture and related activities. The approach to agriculture is two-fold: improving output through higher doses of outlays on water management and productivity, and strengthening of the logistics relating to this sector.
Recognising the high level of wastage in the farm sector, the Budget focuses sharply on creating an environment for higher investment in the warehousing space, with emphasis on cold storage, where there are limited facilities today. It is hoped that these measures would be sustained in the next few years, as agriculture requires continuous attention to become robust and resilient to weather conditions. The Budget is also focused on being “inclusive” with considerable allocations towards social uplift, with the NREGS being the fulcrum. The commodity market would welcome the focus on warehousing as this is one area which is critical for its operations. The excise segment will be the main driver of the Budget in the coming year, and the only concern would be on inflation on the side of manufactured goods if these increases are not countered by the decreases in customs duties on other goods.
