'This budget could trigger inflationary pressures'

Siddhartha Ray, Managing Director, Data Access India and President - Internet Service Providers Association of India (ISPAI)

On the overall budget and its effect on the Indian economy:

Quite a few announcements made the Finance Minister were on expected lines, however this budget could trigger inflationary pressures due to the fiscal deficit of 5.7% and more so due to the imposition of service tax on a wide range of day to day services required by most households.

The reduction of customs duty on IT capital goods is a good measure. This along with the additional outlay in Optic Fibre Cable (OFC) backbone will help ISP's to acquire connectivity at lower cost.

With regards to telecom industry the removal of CVD on handsets will help in expanding the mobile subscriber base. The reduction of customs duty on capital goods is another good measure for expansion of investment in this sector.

The shortcomings in the budget

Today's budget can be well described as banal. There were no specific measures announced to boost economic activities except removing FII investment from sectoral caps. However this may not trigger large FII inflows unless overall industrial and investment climate improves, and this budget has done little to boost such sentiments.

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