The Hindu Business Line : Focus on business continuity

The measures proposed in this year's Union Budget reflect on business continuity with stable direction, and will further augment medium and long-term growth.

The thrust on Agriculture and Rural Infrastructure is commendable, and will further strengthen the backbone of the Indian economy. The projected 3.8 per cent GFD/GDP target and a projected Revenue Deficit at 2.1 per cent of GDP, reflect the Government's serious commitment towards Fiscal Consolidation and is in line with FRBM provisions.

The agricultural sector will definitely benefit from the strong impetus provided in the Budget. The announcements will have a direct and positive impact on the key components of the agri-value chain.

A significant step is the notification of the Food Processing sector as a priority sector for bank credit. This will substantially enhance investments in food processing sector at competitive financial costs.

The references and encouragement to Micro-Finance by bringing in more SHGs under credit linkage (from about 8 lakh to 11 lakh SHGs), and the proposal to allow MFIs to tap the ECB market will provide the much needed momentum for this vital sector, ensuring deeper and wider growth across various markets and income segments.

We are particularly pleased with the large dose of infrastructure initiatives that have been announced in the power generation sector, rationalisation of the National Highway Authority framework and its rollouts and support to the Bharat Nirman programme. Another interesting development is the reinforcement of India as a knowledge driver, sectoral economy with global competitiveness gradually being achieved in auto manufacturing, semi conductors, gems and jewellery, agribusiness, textiles, steel and metals, petroleum products through rationalisation of tax incidence/incentives.

In this respect, various grants have also been announced for stimulating educational institutions in Kolkata, Chennai and Mumbai. This coupled with the priority accorded to R&D in technology, is a reflection of the future potential of superior education.

Debt markets are finally receiving greater attention with the current cap on gilts raised to $2 billion and FII investments in corporate debt up by $1 billion to a $1.5 billion cap.

In addition, the NDS-OM being extended to MFs, PFs, pension funds, accompanied by the intent to create a unified exchange traded market for corporate bonds augurs well for the overall future development and depth of debt markets in India. Overall, the Budget ensures a strong pathway for the economy to enter an era of double-digit growth. Overall rating, 9/10.

(The author is Managing Director & CEO, YES Bank.)