Being the vote-on-account Budget, just before the election, not much was expected of the Finance Minister P. Chidambaram. Given these constraints, the Indian Merchants' Chamber (IMC) believes that the Finance Minister presented a reasonably balanced Budget. On the positive side, the importance of the manufacturing sector has not only been given lip service but excise duty has also been reduced on many products, including capital goods. This will generate demand in the economy, which will boost sentiments. On the other hand, it is mounting subsidies, which is responsible for expanding our fiscal deficit to unsustainable levels.
The quality of expenditure does matter and it is disconcerting that while there is a reduction in plan expenditure, non-plan expenditure has been steadily inching upwards. There was also no mention of the proposed rollout of Goods and Services Tax (GST) and Direct Taxes Code (DTC), even though Chidambaram did hint that an elusive political consensus remained the key issue in bringing about this momentous tax reform.
The FM's speech reads like a Report Card of the achievements (and not the failures) of the United Progressive Alliance's rule of the past decade, than the Budget per se. All in all, it is a policy announcement, which plays it safe and does not attempt anything risky.
Shailesh Vaidya, President, Indian Merchants' Chamber (IMC)