Fuel price rise will add to food inflation

Comment: Vinita Bali. MD, Britannia Industries Ltd

The Budget addresses key issues impacting the economy and sets a roadmap for bringing down the fiscal deficit from 5.5 per cent in 2010-11 to 4.1 per cent in 2012-13.

It addresses the issue of expanding disposable income through reduction in personal income tax. The tax benefits for research and development will encourage more research-led development, which will benefit industry. It also gives adequate attention to both urban and rural India with substantial incentives for agriculture, infrastructure development and investments in primary education & healthcare. The steps taken for simplification of the FDI regime and expansion of the banking sector with licences to private players and NBFCs are positive measures to boost the economy. All these measures will help India achieve higher growth rates in 2011 and beyond.

The Budget could have had more holistically addressed measures to rein in the runaway inflation in food. It is, in fact, likely to further exacerbate the situation, as a result of added duty on petrol and diesel.