Budget reflecting strength of economy

In terms of policy direction, continuity has been maintained with respect to macro economic growth, says Ravi Uppal, Vice Chairman and Managing Director, ABB India.

On the whole, the budget was along expected lines reflecting the strength of the Indian economy, growing at over 8 per cent, with inflation in check and fiscal & revenue deficits under control.

In terms of policy direction, continuity has been maintained with respect to macro economic growth, focused on creation of social and physical infrastructure.

HT Image

The continued focus on the power sector, facilitation of FDI in infrastructure, the setting up of an empowered committee for power reforms led by the PM and involving the states are welcome steps but speed of implementation will hold the key.

De-blocking of coal reserves, focus on rural electrification and non-conventional energy, extension of 80 IA tax benefits for power projects to 2010 should provide further impetus to the sector.

Initiatives on cluster development and high-tech industry are welcome steps, though more could have been done for specific encouragement to the manufacturing sector by way of incentives and correction of duty anomalies.

Reduction of peak customs duty and a plan for a national Goods & Service Tax (GST) by 2010 are macro positives. Continuation of CST and persistence of FBT (albeit with some incidence relief) are areas where the FM could have gone further. Although modest initiatives have been announced on administrative reforms, we still have a long way to go in eliminating non-value-added and unproductive work for the corporate sector.

(Ravi Uppal, Vice Chairman and Managing Director, ABB India)