Interim Budget 2009: The Pros and Cons...!!!

Major positives of this budget are:

•Major growth drivers this year would be agriculture, services, manufacturing, education & defense
•Increased Rural road development is positive for auto industry
•More emphasis on education by allocating Rs 40900 crore for Bharat Nirman Scheme
•JNNURM will be spending about Rs 11842 crore in this financial year
•Rural Jobs scheme would be provided with Rs 30100 crore in this financial year
•Steps to encourage private placements in infrastructure via PPP
•Interest subvention of 2% for export heavy industries like textiles, handlooms, gems & jewellery, SME and marine products have been extended till September 2009
•The government has relaxed the Fiscal Responsibility Budget Management (FRBM) targets to counter global economic slowdown

Major negatives of this budget are:

•It will be difficult both for domestic and foreign investors to raise money as no reforms have been laid out
•Infrastructure developments had been levied only to government institutions leaving out no specific scope for private investors to raise money easily out in this market
•Industry reforms were missing especially for various sectors like infrastructure, manufacturing, banking, exports which led to a steep fall in stock market for two consecutive days correcting to about 5.5%
•Finance Ministry has relaxed fiscal responsibility and budget management standards reflecting that its not going to be a progressive year
•During crisis or slowdown taxes should cut to relax the burden of common man but it’s not an aam-aadmi budget
•Additional plan expenditure has to increase by 0.5-1% a post poll which is next to impossible and it is expected to go up by 4-5% atleast
•Budget revenue deficit seen at 4%, fiscal deficit at 5.5%-currently at 6%
•Budget plan spending is very limited need to be increased after elections
•Industry production fell by 2% in 2008 & left out completely and is expected to a major fall in this period
•Challenge related to FDI & FII capital flows along with meeting inflation target of 4%
•Industrial growth fell by 2% on yearly basis still nothing much has been done in this budget