Budget: Who flayed the FM, who praised him

Opposition parties on Monday came down heavily on General Budget 2011-12 dismissing the exercise as "very disappointing and directionless" and said it has failed to address the problems of unemployment and price rise affecting the common man.

The Left and the Right saw nothing much to write home about the budget, which they said was an exercise of "nominality" given the elections in five states round the corner.

Leader of the Opposition Sushma Swaraj regretted that the Budget did not have even the mention of the word 'unemployment' nor has any plans for controlling price rise.

"It is a very, very disappointing Budget, which has not done justice to the common man, woman and the youth," the BJP leader said, adding that the only thing good was the rise in remuneration of Anganwadi workers and helpers.

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CPI leader Gururdas Dasgupta said Finance Minister Pranab Mukherjee had not mentioned what is the additional tax on the "affluent middle class and millionaires" at a time when the rich are growing richer by the day.

"This is a budget of nominality with elections in five states on the mind of the finance minister," Dasgupta said, adding that the exercise showed that there has been no change in the policies of the ruling dispensation.

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Terming the budget as "timid", former Finance Minister Yashwant Sinha said, "the budget is exactly according to the personality of the Finance Minister as the budget is completely devoid of reforms. It is not tackling any reforms."

Biju Janata Dal MP Jay Panda described it as "mixed budget" but rued "no steps were taken by the government to contain the inflationary trend in the Budget."

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Rashtriya Janata Dal D chief Lalu Prasad said he was "happy" about the Budget.

Asked if the Budget was aimed at the forthcoming elections in states, Samajwadi Party spokesperson Mohan Singh said, "It may be even aimed at the Genera Elections also."

He described revolutionary step providing cash subsidy in fertilisers, LPG and kerosene directly to consumers.

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Prime Minister Manmohan Singh on Monday said the Budget was aimed at consolidation of fiscal deficit and moderation of taxes and will meet challenges of the economic growth of the country.

On the controversial black money issue and lack of any amnesty scheme in the Budget to bring it back, Singh said there have been such schemes in past that have yielded little success.

"I don't think they have succeed in providing permanent cure for black money. We need to have a systems reform in a holistic manner to deal with this menace," he said.

Congratulating Finance Minister Pranab Mukherjee for doing a "commendable" job, Singh said, "You cannot please all the people. The finance minister has done as good a job as possible."

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Terming the Budget as "good" and "balanced", Union Home Minister P Chidambaram on Monday said it will promote inclusive growth and the projected increase in revenues will be used for augmenting investment in health, education and security sectors.

"The finance minister has focused on high growth; on investing in, incentivising and increasing agricultural production in order to moderate inflation; and on fiscal consolidation," said Chidambaram in a statement released after the Budget presentation by Finance Minister Pranab Mukaherjee.

The home minister, who used to hold the portfolio until November 2008, said Mukherjee has used the projected increase in revenues for augmenting investment and for larger outlays on education, health and security.

"We are very happy and I compliment the Finance Minister on presenting a good and balanced budget that will promote inclusive growth," he said.

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Welcoming the increased allocation for education as well as telecom sectors in the Budget, Union Minister Kapil Sibal on Monday said the interest of the common man has been taken care of.

Sibal said he was happy with the increased budgetary allocation of Rs 52,000 crore (Rs 520 billion) for the education sector and around Rs 25,000 crore (Rs 250 billion) for the telecommunications sector.

"I am happy with the allocation made for the education sector. The total allocation is about Rs 52,000 crore (Rs 520 billion). I am also happy about the allocation made for telecom sector which is about Rs 25,000 crore (Rs 250 billion)," said the Union minister for HRD and telecom.

Sibal said the aam aadmi is being looked after in the Budget and so many steps are being taken for fiscal consolidation.

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The Congress too hailed the budget saying the finance minister did not take any "cheap populist step" and the exercise was a reflection of an India aspiring to become super power.

Party spokesman Manish Tewari said, "concrete steps have been taken to strengthen the economic fundamentals in the Budget," adding the Finance Minister's exercise was futuristic.

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The industry welcomed the Budget terming it as "positive" and "growth-oriented" and some leaders were pleasantly surprised with the unchanged excise rate in major sectors.

"Overall, the Budget is a growth-oriented and a good one and it has not taken the last year's growth for granted," CII president Hari Bhartia said.

He, however, said the finance minister should have given more stress to the health sector and the "demand for treatment of healthcare as infrastructure has been overlooked".

Bhartia said the targetted subsidy on kerosene and food will reduce the wastage of subsidy.

"Also the digitisation of I-T system will expand the tax base. Compliance and self regulation will reduce human interaction," he added.

Expressing similar views, Kotak Mahindra Bank vice chairman and managing director Uday Kotak said: "The Budget is positive for the equity and bond market. A 4.6 per cent fiscal deficit is looking like a very good number."

He said the auto sector was expecting a hike in excise, which has been kept unchanged at the existing levels.  "Budget has positively surprised us," he said, adding the "Budget has done better than normal expectation".

He, however, said that the income tax relief provided to general tax payers as "marginal move" as it has been increased by only Rs 20,000 to Rs 1.80 lakh from current limit of Rs 1.60 lakh.

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Commenting on the proposal to launch a national mission for hybrid and electric vehicles, Society of Indian Automobile Manufacturers president Pawan Goenka said: "This is a very welcome move. It will allow advanced technologies to be developed in India rather than importing technology."

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Although there were no specific measures, such as allowing FDI in multi-brand retail, Future Group chief Kishore Biyani said the government is showing its recognition through the Budget what the modern retail has been saying so far.

"The announcements made to strengthen the farm sector, cold chain investments and recommendations to amend the Agriculture Produce Marketing Committee Act are all indicative of the government's will," he said.

"All the measures announced today are a precursor for things to come," Biyani added.

ENAM Securities chairman Vallabh Bhansali: "He (Mukherjee) has succeeded in fighting all populist forces I am happy with what he has done."

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Expressing satisfaction over the various proposals of the Budget, Godrej Group chairman Adi Godrej said: "I think it was a very well balanced Budget and growth oriented. It will be very good for the economy. The decision to formally introduce the constitutional amendment for GST is a very good one."

He said increase in limit for income tax exemption for tax payers will add to consumption "which is desirable".

While welcoming the reduction in surcharge for companies from 7.5 per cent to 5 per cent, Godrej, however, said: "It is desirable, although I would have liked to see surcharge completely removed.

"I didn't see any thing negative in the Budget. But what I like the best is that the widely expected increase in excise duty was very sensibly not resorted to," he added.

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Terming the Budget as balanced, HSBC India country head Naina Lal Kidwai said: "The finance minister has  allowed the growth agenda to stay on track."

She also said the Budget has also set the direction for financial sectors reforms with Mukherjee promising take forward many pending Bills in Parliament soon.

Ficci President Rajan Bharti Mittal said the Budget is balanced and will sustain the growth momentum, while giving main emphasis on agriculture and manufacturing.

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However, not all industries were happy with the Budget proposal, specially those in the iron ore mining sector which will now have to pay 20 per cent export duty.

"Iron ore industry will not be able to absorb it (export duty 20 per cent). It will affect export earnings of the country," Roongta Mines Ltd president Siddharth Roongta said.

Principal Economist for Deloitte in India Shanto Ghosh said: "Overall, the policy prescriptions outlined in the Budget were lacklustre and can be considered more of tinkering around the edges without ushering in radical reforms."

Ghosh, however, said the commitment to refrain from additional borrowing to fund the fiscal deficit will certainly help retain the momentum in terms of private investment that is critical to sustained growth.

Motilal Oswal Joint MD Ramdeo Agarwal said no increase in excise rates has boosted market. "Auto and banking sectors are clear winners in Budget."