Budget '10

The message of the Union Budget 2010-11 is positive. It signals prudence and solidity. It confirms that the liberalisation and economic reforms remain very much on the cards.

The Budget also conveys the clear agenda of the government to achieve an ambitious growth target - double-digit GDP growth over the medium term.

The move towards achieving an improved fiscal balance is also clear.

In a sense, the Budget also marks a transition point, as the policy focus shifts away from the crisis mode of the past year-and-a-half to the longer-term vision of India as a major global player. The Budget had to juggle multiple concerns and objectives, revving up GDP growth, greater fiscal stability, containing inflation and promoting inclusiveness.

The FM has stressed the need to improve the effectiveness of government institutions and remove the bottlenecks in delivery systems. Perhaps for the first time, the FM has articulated the view of the government being an enabler.

The Budget lays the ground for the economy to achieve a growth of around 8.5 per cent in 2010-11. There is a significant step-up in outlays in areas such as agriculture, coal, roads and infrastructure.

Measures such as targeting construction of 20 km of roads daily and introducing competitive bidding for mining of coal blocks will provide significant stimulus. If there is one factor that constrains India's potential from being unleashed, it is the infrastructure gap. Hence, every initiative aimed at addressing infrastructure is to be welcomed.

Proposal for additional banking licences to private sector is a welcome surprise. One hopes that industrial houses will be allowed to bid for them.

The Budget has a host of measures to benefit the farm and rural sectors - increase in outlays for water harvesting, dryland farming and storage facilities.

The Direct Tax Code has far-reaching implications and the feedback from industry is still being studied. I believe that if the final legislation is well-honed, the wait will be well worth it.

Lets hope this budget gets us way out of fiasco of recession..........