Bangalore, March 1
ON a macro-economic level, the Budget proposals for 2005-06 appear to have undercurrents of increased interest rates and inflation since huge expenditures are planned with no resource mobilisation efforts visible beyond the generally expected buoyancy in tax collections through growth.
While presenting the Budget on Monday, the Union Finance Minister, Mr P. Chidambaram, had also warned about the difficulty in being compliant with the Fiscal Responsibility Bill.
Mr Harish H.V, Practice Director, South India, Grant Thornton India Pvt Ltd, said while the focus on the growth sectors such as textiles, IT and pharma,was welcome, the Finance Minister should have added the automotive sector to this list since it was another major driver of growth and employment.
Mr Harish said it was, however, disappointing that there was no mention of disinvestment or further public sector reform. "One did not hear either a target or achievements, which were highlighted last year.
"It is welcome that for the first time the Finance Minister had talked about incentivising employment, which was the international practice rather than capital investment that was the traditional practice. This seemed to have been achieved by disincentivising investment through lower depreciation, which would hurt infrastructure investments. However, there was no corresponding incentive to create employment or the much awaited exit policy," he said