What they say

Innovative approach

It is imperative to build fiscal credibility by sticking to the 13th Finance Commission's roadmap for deficit reduction and ensuring stability of the growth process, said SBI Chairman, Mr O. P. Bhatt. With recovery gaining traction, the rollback of the fiscal stimulus measures, already begun last year, has been taken forward. As an innovative approach to financial inclusion, the Government is espousing direct transfers as a means of reaching out to the large number of population below the poverty line. The Budget has moved into inflation control mode by focusing on management of the supply side and being in sync with a tightening monetary policy.

Reformist budget

The Budget is reformist in character as it has laid out a definitive timeframe for rolling out of the Direct Taxes Code and commitment to the GST, said Mr Alok K Misra, CMD, Bank of India. The Government will come out with a manufacturing policy and to increase the share of manufacturing in GDP from present 16 per cent to 25 per cent over 10 years. This will help in creating a job plus growth scenario. The proposed new banking licences in the private sector will not only enhance competition and efficiency but will also promote financial inclusion. Encouraging foreign funds to the domestic mutual funds and infrastructure will give a boost to these sectors.

Enough headroom

The Government has shown its commitment for capital infusion for banks. The Rs 20,157 crore for 2010-11 and Rs 6,000 crore for 2011-12 are quite substantial, said Mr M. Narendra, Chairman and Managing Director, Indian Overseas Bank. This will give also banks enough headroom for raising Tier-II capital. With the thrust on core sectors such as infrastructure there is enough room for banks to take an active role in the country's growth.

Towards fiscal consolidation

“The Budget focuses on areas requiring significant investments, while seeking to take forward the process of fiscal consolidation. The priority accorded to achieving greater economic inclusion and addressing the challenges that we face will stand the economy in good stead as it reverts to a sustained high growth path,” said Ms Chanda Kochhar, MD and CEO, ICICI Bank. Also, the process of consolidation has not come at the expense of reduced spending in important segments of the economy and, therefore, the consolidation process is expected to have a positive bearing on economic prospects in the long-term, she added.

Infra needs funds

A key positive in the Budget is the plan to bring the fiscal deficit down below 5 per cent of GDP. The Government has been applauded for keeping a tight check on the deficit last year. If it can continue to maintain this discipline, it will be a big achievement, said Mr. Neeraj Swaroop, Regional Chief Executive, Standard Chartered Bank. The move to raise limits on foreign institutional investment in infrastructure bonds is laudable as the infrastructure sector requires significant capital investments, all of which will not be met by the domestic market. Also positive is the move to allow FIIs to invest in local mutual funds.

For level-playing field

Mr Shyam Srinivasan, MD and CEO, Federal Bank, said mutual funds would see buoyancy, but a lot depended on the execution of the policies. “But as a private banker I am disappointed as we do not have a level-playing field compared to the public sector banks. In some states we are bigger or equal to the PSU banks, but we cannot pass on the benefit of the interest rate subsidy to our customers as the subvention is available only to PSU banks.”

Neutral to positive

Mr P. Jayarama Bhat, Managing Director, Karnataka Bank Ltd, has termed the Budget for 2011-12 as neutral to positive with a definite growth orientation in terms of overall objectives. Fiscal deficit target of 4.6 per cent, which is projected, is achievable, considering the past performance of the current finance team, even though the numbers are too optimistic. With this, the interest scenario for the coming financial year may be moderate, he said.

Good and progressive

Mr Ramnath Pradeep, Chairman and Managing Director of Corporation Bank, said that the Budget is good and progressive. Stating that the Budget has taken care of all sectors, he said duties have been reduced in certain sectors and certain new initiatives have been initiated in some other sectors. Stating that the housing sector will get a boost, he said the priority sector advances of the banks will increase on the housing side. He stated that a lot of rationalisation will take place when GST comes into effect.