The Hindu Business Line : Not a strong enough dose

THE Budget takes the UPA Government's agenda for inclusive growth and economic reforms a few steps forward. Overall, the aim is to stimulate economic growth to around 7 per cent and create 7 million new jobs over the next few years.

The Budget also attempts to rein in fiscal and revenue deficits. The Budget has been somewhat good to the corporate sector with cuts in direct tax rates from 35 to 30 per cent. Depreciation rates have also been reduced.

The net tax burden will, therefore, fall marginally by 3 per cent. Personal income tax again is a mixed bag as several exemptions have been done away with. Overall, this would widen the tax base and improve compliance.

Special concessions for the pharma industry, which the FM described as a sunrise industry, are regrettably absent. Incentives, particularly for R&D, would have made the industry a global force to reckon with. The industry had requested raising the 150 per cent weighted deduction for R&D expenditure, including land and building, to 200 per cent and extended till 2015. However, this has not happened. Similarly the section of the I-T Act dealing with 100 per cent R&D units has been extended by only two years.

So, despite promises, there is no sight of a stable policy environment for pharma and biotech.

On a more positive note, the Budget underlines the Government's strategy for inclusive growth by bringing rural India into the mainstream by developing rural infrastructure.

On the domestic front, credit should become available at more competitive rates.

Overall the budget has balanced the UPA government's economic agenda with the political agenda of its allies. The FM made a passing reference to foreign direct investment and none to disinvestments, possibly in deference to the allies.

(The author is CEO and MD, Ranbaxy Laboratories Ltd)

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