Given the slowing economic growth and rising inflation, the finance minister has had a difficult job of devising the economic plans for 2012-13. Despite challenges, the government has been able to deliver a practical and inclusive Budget for the next financial year.
Mukherjee’s strategy towards fiscal consolidation will play an eminent role in containing challenges faced by the economy and contribute towards achieving 7.6 per cent GDP growth for 2012-13. With the ongoing long term focus on planned fiscal deficit reduction, the Budget proposes noteworthy reforms across manufacturing and infrastructure sectors, that should help boost employment.
Reforms announced are expected to add thrust to agriculture and power sectors, revive aviation industry. Enhanced focus on governance — in measures like UID funding — will increase disposable income in rural areas. Reduction in subsidy is welcome, but the process of implementation needs more detailing. Other laudable efforts are in definite moves towards, DTC, GST, FDI in multi-brand retail — but these need a deadline.
The telecom sector is already burdened with multiple and high tax levies, which account for 30 per cent of services revenue. The rise in service tax will increase the cost of services to customers and also impact the companies, and in turn, the consumer. We see proposals on mobile-based fertiliser subsidy tracking and heightened IT-enablement as factors that will drive growth. Additionally, recommendations for gap funding of telecom towers, cables and optic fibres should lead to reduction in capital cost for telecom infrastructure. Reduction on duties on mobile parts should enhance affordability and stimulate demand for mobile services across the country.
Sanjay Kapoor CEO, India & South Asia, Bharti Airtel
