The Hindu Business Line : Tangible steps to growth

WITH A comprehensive set of broad-brush as well as focused measures, Budget 2005-06 aims at cementing the platform to propel the Indian economy on a sustained growth trajectory. The Finance Minister, Mr P. Chidambaram, must be complimented for outlining a holistic approach towards rural development and a range of initiatives for infrastructure and industrial growth, supported by important measures for development of the financial sector.

The Budget has outlined a focused sectoral approach to improving industrial activity in order to create competitive advantage and generate employment. The measures announced for textiles, pharma and biotech, among others, should help the country achieve the objectives of creating high impact catalysts for growth and employment. The Budget has clearly stated that the Government, the public sector enterprises as well as the private sector need to play complementary roles to ensure overall economic development. The private sector would be the driving force in the services sector, while in the manufacturing sector, the government and private sector would both participate and compete.

The Government has reinforced its commitment to playing a lead role in infrastructure development. The recognition that mobilisers of long-term funds such as insurance companies and pension funds will have an important role to play in funding infrastructure projects is welcome step forward.

On the rural front, the Budget shows a thoroughness of approach by providing a comprehensive roadmap aimed to impact all the critical areas involved in rural economic activity, such as development of irrigation, roads, housing, drinking water, rural electrification and telecommunications.

By encouraging delivery of financial services through agents and banking correspondents, the budget makes it possible for banks to meet the challenge of sustainable, efficient, low-cost intermediation in the rural areas.

Overall, the Budget is growth-oriented and aims at achieving growth on a holistic basis through inter-linked, tangible steps.

(The author is Deputy Managing Director, ICICI Bank.)

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