This year’s Budget has come at a time when the global economy is gradually reviving, the domestic economy is experiencing high inflation and export markets are slowly picking up. The finance minister’s challenge was to create conditions for sustained high economic growth and take measures to contain inflation. I think that under the given circumstances, the finance minister has been able to strike a good balance.
In last year’s Budget, he had announced a road map to bring down fiscal deficit to 4.1 per cent by 2012-13. In FY 11, the deficit has come down to 5.1 per cent and will further reduce to 4.6 per cent in FY12. In view of this, the finance minister has set a challenging target of three per cent for FY 14. It is clear the government’s fiscal consolidation plan is on track and strengthening the fundamentals of the economy continues to be a major priority.
The emphasis on infrastructure is evident from the higher allocation along with simultaneous resource raising measures. Reforms in the insurance, pension funds and banking sectors reflect the government’s commitment to continue on the path of accelerated reforms. Increased budgetary allocations for agriculture, social sector, defence, education and healthcare are all welcome features of this Budget.
From a manufacturing perspective, we welcome the announcement about a new manufacturing policy as well as the government’s intent to increase the share of manufacturing in GDP from the present 17 per cent to 25 per cent in the next 10 years. Setting up of a National Mission for Hybrid and Electric vehicles coupled with exemptions in indirect tax on kits and parts of hybrid vehicles are welcome measures and reflect the government’s commitment for a clean environment. From an exporter’s perspective, government’s decision of reducing transaction costs and simplifying procedures will go a long way in making Indian exports more competitive. Maintaining existing rates of customs and excise duties and service tax has signalled that the government is in no hurry to withdraw the stimulus. With this the momentum of growth in the domestic economy will carry forward into the next financial year, our export competiveness will improve and with continuing revival of the global economy, will result in accelerated export growth.
Chairman & Managing Director, Bharat Forge