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K.Venugopal

IF one had expected a number of measures from Mr Yashwant Sinha to spur private investment, there was only disappointment.

One would have to drive down to the farm to look for a business opportunity the Budget created.

Manufacture of some agricultural implements has been de-reserved. Removal of restrictions on new milk processing capacity is a landmark change in what is the world's largest market for milk. Yet one would like to see who comes forward to compete with the likes of Amul, Nestle and Britannia, companies that have entrenched themselves over the years with the protection of the licensing system.

Farmers have been promised the freedom to move produce anywhere in the country, but as implementation is with the States, Mr Sinha's statement for now is but a wish.

He has allowed 15 per cent higher depreciation on new plant and machinery, but many industry captains are unimpressed as they are already loaded with excess capacity.

Private investment in roads (as opposed to laying them on contract to the National Highways) has been stumbling on the issue of toll collection, as road users are stubbornly unwilling to pay toll. But there is nothing in the Budget to promise relief for investors such as Larsen & Toubro caught with paltry revenue streams.

The power sector has been a graveyard for many a private initiative. Ports and even airports (witness Kochi) have proved difficult destinations. Which is why Mr Sinha believes he must bat on his own: Government is stepping up its own investment in power, roads, and railways by between 22 and 40 per cent over the previous year to a total of Rs 37,919 crore.

Incentives have been announced to draw the private sector into investing in airports. Passengers using a privately-built greenfield airport are exempted from paying travel taxes if the State Government reduces the sales tax on aviation fuel to the Central sales tax rate. The Airports Authority would also provide equity or financial assistance to the private initiative. Mr Sinha has hung out the carrot, a rare gesture in this Budget essay. Will the rabbits turn up?

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