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'It is certainly better than the last Budget'

Rakesh Mittal

It is a growth oriented Budget, and I will grade it at 8 on a 10-point scale.

It is too early to come to the conclusion that the markets have reacted unfavourably to the Budget. I strongly believe that the capital market will respond positively and the Sensex will go up by over 200 points tonight.

There is a tremendous focus on infrastructure projects. With the ceiling for FIIs going up to 49 per cent, this will end in resource mobilisation. And the exemption for long term capital gains if invested in the primary markets will spur growth in the capital markets.

On the telecom side the extension of the five-year tax holiday up to 2003 is a positive step, although the telecom sector would have been happier to get a 15-year tax holiday. Another excellent initiative by the finance minister is on integrated education programme for elementary and primary school children. The positive factor in this is the 100 exemption on donations made to engineering colleges. I only hope this is also extended to institutions engaged in IT, software and management education.

The import duty on FMCG products at the MRP rate instead of the FOB rate is a welcome step and will provide relief to the industry against competition. This will take care of Chinese imports to a large extent.

There has been only a slight tinkering on the customs duty front, that is in the withdrawal of surcharge. However, the import duty on CDMA equipment has not been brought down to the levels of duty on cellular equipment. The import duty on basic telephones has come down to almost 35 per cent, from 51 per cent. However, we are fully prepared to take on any competition in the field of push button telephones.

The finance minister has indeed taken a bold initiative to review labour laws and I hope that these reforms get implemented in the right perspective.

This Budget is certainly in the right direction, i e, investments in infrastructure and education, and is certainly better than the last Budget, and would result in economic growth.

Rakesh Mittal is Managing Director, Bharti Telecom

Budget 2001

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