The Hindu Business Line : An inclusive, Bharat budget

The Finance Minister has rolled out a ‘Bharat’ budget. Key themes are inclusivity and common man, with a socialism flavour thrown in. The boldest step is the loan waiver and restructuring scheme for farmers. One move I would applaud is the focus on education. For a country which will add the largest quantum of working-age population to the world economy by 2015, all efforts should be to improve the competitiveness of the workforce and, to that end, the budget puts the right step forward.

The 20 per cent increase in education spend (ahead of other spends) is well distributed across the country and across all levels, that is, from new IITs, IIScs and ITIs to Secondary Education Scheme, National Skill Development programme and National Knowledge Network. The budget institutionalises right governance mechanism to ensure funds are spent as planned. In the long term, the country will benefit from these initiatives.

There are outstanding issues of the IT sector that remain to be addressed. The industry expected the Finance Minister to address the discontinuance of the STPI scheme but this has not happened. Introduction of service tax on customised software and increase in excise duty for packaged software is a negative for a country that has to catch up on its IT sophistication. On direct taxes, re-look at some of the FBT provisions is a welcome step, though industry would have liked the Finance Minister to reconsider the FBT on ESOPs. A suitable management policy on excess capital flows is crucial for the country’s long-term competitiveness.

Overall, the focus of the budget remains on social reforms.

(The author is CFO, Wipro Ltd)

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