Industry & Economy
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Automobiles
Seeks to stimulate consumption
Mr R. Seshasayee, Managing Director, Ashok Leyland
The Budget is a cocktail of good economics and good politics. It attempts to address three main challenges facing the economy. The first is that India’s growth has all along been consumption-driven and is now beginning to be investment-driven.
But at this stage, consumption is slowing down. The Budget seeks to stimulate consumption by cutting taxes and putting money in the hands of people. The second challenge is to bring about inclusive growth, which can come only from public policy. Higher allocation to schemes, such as Bharat Nirman, is a welcome step in this direction. The third is that of farmers’ distress. From a purely economic point of view, the loan waiver may be wrong because of the ‘moral hazard’ it brings in its wake, but the situation warrants measures to resuscitate the distressed farmers.
I am personally happy that the Finance Minister has created a company to focus on skill development. The CII has requested for skill development measures in its pre-budget memoranda in the last two years. I would like to place on record my gratitude to the Finance Minister for accepting it.
With regard to agricultural credit, one worry is the non-address of issues relating to the robustness of the distribution mechanism.
For the commercial vehicle industry, as for the rest of the industry, excise duty reduction is a move in the right direction as it reduces the embedded taxation and improves competitiveness of the Indian industry. I particularly welcome the additional excise duty reduction in respect of bus and chassis — as public transport has a potentially larger and more beneficial role to play. I also welcome the tax incentives for green technology.
One major sector that possibly did not get its due is the infrastructure sector — unless one interprets this as the major role expected of private investments.
(As told to Business Line.)
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