For a banker, Mr Pranab Mukherjee's 197 paragraphs of speech on February 28 was an honest effort to bring balance between inflation and growth; for trade and industry, it was eco-agri budget, and for a chartered accountant, it was a lacklustre budget.

This was how the panelists at the Business Line Club ‘Budget Talk' 2011-12, sponsored by Syndicate Bank at the Srinivasa Institute of Management Studies in Mangalore on Thursday, described the Union Budget 2011-12.

Mr Ananthakrishna, Chairman of Karnataka Bank Ltd, who initiated the ‘Budget Talk' said Mr Mukherjee has made an honest effort to bring balance between inflation and growth in the budget.

Highlighting Mr Mukherjee's announcement to bring down fiscal deficit further down during 2011-12, he said this issue is related to interest rate scenario in the banking sector. Interest rates will rule low if the fiscal deficit is controlled.

Referring to the relationship between Plan and non-Plan expenditure, he said containing non-Plan expenditure is a Herculean task.

Of the 197 paragraphs of the Budget speech, the banking sector was mentioned in four or five paragraphs. One of them is about licence to new banks. The RBI has issued a discussion paper in this regard.

Stating that 40 per cent of people in the country don't have banking facilities, Mr Ananthakrishna said there is a scope for new banks to serve this segment.

interest subvention scheme for farmers

On the interest subvention scheme for farmers, he said the private banks were not given this benefit when it was introduced last time. But the private banks will also have to adhere to the 18 per cent agriculture credit disbursement target. There should be a level-playing field in this matter. However, one per cent interest rate subvention is available to all the banks.

The increase in the income-tax limit from Rs 1.6 lakh to Rs 1.8 lakh will help improve the savings scenario in the country.

He concluded his analysis by saying that budget provides more opportunity for banks to face competition, to ensure every Indian got banking facility and to ensure financial inclusion a reality.

education loan segment

To a query on the impact of budget on education loan segment, Mr Ananthakrishna said there is no dearth of education loans for eligible candidates. But there needs to be some mechanism to track the beneficiaries later on.

Mr G.G. Mohandas Prabhu, President of Kanara Chamber of Commerce and Industry (KCCI), termed Mr Mukherjee's proposals as eco-agri budget as it focuses on ecology and agriculture sector.

There are a lot of schemes for cultivation of pluses and vegetables, and for sectors such as milk and organic manure production, and for livestock rearing. These schemes will lead to the production of protein-rich foods in the country. Stating that a majority of people in the country will be in the younger age group by 2025, he said these schemes will help strengthen that segment.

Referring to the colossal wastage of fruits and vegetables in the country, he said the proposals to build supply chain and warehouses should help arrest that loss. This will provide a wonderful opportunity to trade and industry in the country.

However, the imposition of MAT and dividend distribution tax on SEZ developers is a cause of concern, he added.

Speaking on the occasion, Mr A. Raghavendra Rao, Chartered Accountant and President of A. Shama Rao Foundation, urged the students to become the future budget makers of the country. Terming it as a lacklustre Budget, he said some tinkering has been done in this Budget.

Stating that interest subvention and extending loans to agriculture sector is good, he said moves such as waiving of loans (as happened in some previous cases) will not be good for the economy. However, the Budget is in favour of healthcare and education sector, he added.

Mr J.S. Shenoy, Deputy General Manager of Syndicate Bank, was present on the occasion.

Dr P.S. Aithal, Principal of the institute, proposed a vote of thanks.

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