A roadmap for fiscal consolidation

COMMENT: Baba Kalyani, CMD, Bharat Forge

This year’s budget has come at a time when the economy had just begun to recover from the impact of an unprecedented global economic crisis. The Finance Minister’s challenge was to support the resurgent momentum of growth in the economy, create conditions to scale up growth to above 9 per cent that we had experienced between 2005 and 2008, and balance growth with equity to make it more inclusive. He had to do this without compromising on fiscal prudence, while keeping inflation in control.

The reduction of surcharge would result in a lower rate of corporate tax but this would, to an extent, be offset by the unexpected 3 per cent increase in MAT. The increase in the price of petroleum products, however, is quite significant and would lead to higher inflation.

We still believe that this is a visionary budget, a road map to progressively bring down the fiscal deficit.