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'This is a revenue generation exercise that will raise the prices of many consumer products'

Being the first millennium Budget and considering that our economy on the whole has been doing reasonably well, our finance minister had a tough job on hand. Expectations were rather high. In relation to that the Budget has been a bit of a disappointment.

Although there are some encouraging news with regards to infotech, media and telecom sectors, there are no path-breaking ideas with regards to containing and reducing the fiscal deficit.

Overall, it is a lacklustre Budget. Directionally, the process of reforms is certainly going forward. But I do believe that a lot more could have been done in the area. For example, faster privatisation, which is certainly one important way of generating revenues and containing the all-important fiscal deficit.

When I say expectations were high, I meant that people generally expected some path-breaking proposals to spur the economy further and faster. In that respect, even some harsh measures like reduction in subsidies or containing government expenditure would have been welcome.

I would like to comment on the revised structure on excise duties. While the concept of CENVAT across the board at 16 per cent is a good move, if you read the fine print you may find that this may have some inflationary impact. As you must have read, all the products where the excise duty was so far at 8 per cent will go up to 16 per cent. The ones at 16 per cent will remain at the same rate while those at 24 per cent will now have a special excise duty over and above 16 per cent. The net effect of this will be a bigger burden.

As you will see from the finance minister's figures, in overall terms this is a revenue generation exercise that will raise the prices of many consumer products. The overall excise duty has actually gone up.

In terms of targeting the business class, the finance minister has not spared people with higher income because he has imposed a surcharge on income beyond Rs 150,000.

I think the strong focus on IT/knowledge sector is well-deserved. This sector has already demonstrated its enormous ability for wealth creation and there are miles to go before tapping the huge potential in terms of exports and the phenomenal enterpreneurial abilities that exist in our country.

As far as I have understood, the finance minister has stated that cheaper sugar in the public distribution system will not be henceforth available to income tax payers. I don't think there is a move to abolish the ration card, which will continue to be needed by the common man to get the controlled price sugar and other related benefits.

C Y Pal is the chairman of Cadbury India Limited.

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