Comment: R Ramaseshan

Projection of 4.6% fiscal deficit seems aggressive

The revised fiscal deficit for 2010-11 was pegged at 5.1 per cent as against the 5.5 per cent declared during the budget. But this was achieved through 3G revenue. For 2011-12, a projection of 4.6 per cent seems aggressive. How this can be achieved remains to be seen. Hopefully, the disinvestment target of Rs 40,000 crore will be met this financial year, else the target looks difficult to achieve.

Similarly, the target for 2012-13 and 2013-14 at 4.1 per cent and 3.5 per cent, respectively is a very aggressive assumption. Continued GDP growth, tighter leash on expenditure and tax buoyancy will probably hold the key to achieving these targets.

For the agricultural commodities and agriculture sector in general, the Budget made quite a few important announcements. The thrust on greater production of pulses, palm oil, rice and vegetables will give food supply in general a fillip. Granting the status of infrastructure to cold storages will go a long way in encouraging greater investment in this area, which in turn will help in counter-cyclical management of food grain supply. As we move towards closer integration with the global economy it is essential that we adopt some of their best practices in various areas, including taxes. Adopting the Goods and Services Tax is a must for that.

This Budget not only reaffirmed its intent towards implementing this in the next financial year (2012-13), but announced a few steps that would take us closer to achieving our goal of achieving a common market for the country. For instance, the decision to bring several hitherto exempted goods under the tax ambit, widening the tax base of services, etc. I hope the State Governments and the Centre will work towards a consensus on achieving smooth implementation of this important legislation.

R Ramaseshan
Managing Director & CEO, NCDEX