FM could have been firm; Rating 7.6/10

To gauge how emerging business leaders see the Budget, the Indian Institute of Management-Calcutta (IIM-C) conducted a poll of 87 students, asking them to rate the Budget on a scale of 1 to 10. The average was 7.6.

The students felt the government could have dealt with the deficit for 2009-10, which stood at 6.9 per cent of GDP, with a firmer hand. They fear a downgrade by rating agencies on this parameter could significantly increase India’s borrowing costs and certainly strain the country’s forex reserves. However, the finance minister has chosen to reduce the fiscal deficit in a slow, phased manner, and problems could arise if the world enters another recessionary phase or if we fail to contain our expenditures.

 

Students also felt that following the Kirit Parikh panel’s recommendations on freeing prices of petrol and diesel, a direct price hike was expected in some form – either a fixed hike or a hike linked to global crude prices. However, the finance minister chose to increase Customs External Tariff, which will adversely affect oil companies. They felt the Budget delivers well on the infrastructure front. They were also pleased with the “right combination of changes in direct and indirect taxes”.

There was a shade of disappointment, though, with the “gradual disinvestment process”, since there were “no concrete targets”. The students also felt exports received some unanticipated but much-needed support.

Sameer Narang
First year student, IIM-Calcutta