A path-breaking and well thought-out Budget

The Union Budget goes deep into the rural areas and touches the lives of most citizens, says Bharti Enterprises CMD Sunil Bharti Mittal.

The Union Budget goes deep into the rural areas and touches the lives of most citizens, says Bharti Enterprises CMD Sunil Bharti Mittal.

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This is a path-breaking and well thought out budget with an eye on infrastructure development and growth. The union budget goes deep into the rural areas and touches the lives of most citizens. I am very pleased that there has been a major thrust at growth and development at the grassroots
level.

This budget had a marked shift in its tone, direction and the overall message and has laid out a grand vision for building Bharat in a manner, which no other budget has been able to do till now.

The emphasis on education for the poor, along with strengthening of the mid-day meal scheme, healthcare, especially in the rural areas, and employment generation programs with clearly spelt out action points and budgetary support will ensure that the entire nation gets engaged in the process of development.

Infrastructure once again got a big push, with a pool of Rs 40,000 crore being arranged through six major financial institutions with a thrust in the area of airports, ports and tourism. The Finance Minister lived up to his promise of being more of an Investment Minster by setting up the Investment Commission, which will promote both domestic and foreign investment. Many more sectors of the industry are being shifted to automatic route.

He has taken bold steps in the area of foreign direct investment (FDI) by enhancing the FDI limit for telecom, aviation and insurance - all three being of vital importance for the growth of the economy. Telecom services need to be rolled out to smaller towns and rural areas. Modern airports and low cost airlines are the need of the hour.

Insurance is a vital area to mobilize money towards the infrastructure sector and enhanced activity by participation of foreign companies will ensure that the infrastructure gets more funds. It is also heartening to know that the new telecom projects coming up within the fiscal year will receive the same benefit under 80-1A as given to the earlier projects ensuring that companies can roll out networks in weaker states like Bihar, Orissa, West Bengal, North East.

The doubling of agricultural credit and promoting agri business is a step in the right direction. India, with it’s vast arable land and perfect weather conditions can become the food basket for the world. The tax holiday for the fruit and vegetables sector is also a step in the right direction.

Water is the lifeline of a nation. The Finance Minister has dared to dream and has announced five pilot projects to repair, restore and augment water bodies around the country and based on it’s success roll out the grand plan to fix all the water sources to realize his dream in seven-10 years.

The Finance Minister was unambiguous about maintaining the deadline of introduction of VAT by 1st April 2005. His statement that the Central Government will compensate the states in the event of any shortfall will go a long way in getting all the states to join the VAT bandwagon. On the tax
front, a bold move has been made to exempt income tax for individuals up to an income of Rs 1 lakh.

Looking at the overall outlay for the weaker sections and rural areas one could get alarmed that the large investment required for the programs could result in unmanageable fiscal situation. That the fiscal deficit has been pegged at 4.5 per cent and a decrease in the revenue deficit at 2.5 per cent is indeed something for which the Finance Minister has to be congratulated.

It is important to mention that the Finance Minister has committed himself to the Budget Management Act 2003 and has sought just one-year extension to ensure that the fiscal and revenue deficit is eliminated by 2008-09.

The industry needs to support the vision of the Prime Minister and the Finance Minister who have outlined a very deep and meaningful action plan for building Bharat by engaging all sections of the society, living in urban or rural areas.

Seven months from now when the Finance Minister presents his next budget, the country would have started feeling the impact of this budget. A foundation for a vibrant India has been laid and we will all watch and pray as the Finance Minister starts putting his vision into action.

Rating on a scale of 10: 9

(Sunil Bharti Mittal is chairman & group managing director, Bharti Enterprises)