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June 14
BUDGET '98
Sinha has done nothing to keep his promises
The failed Indian economic development has conclusively proved that there's more to economic development than throwing fistfuls of money at problems and hoping that they will go away. The nation's obsolete and corrupt bureaucracy, which must translate policies into implementable programmes, needs urgent reform and restructuring.
'Sanctions will affect America more'
'... because if it is not Boeing, it's Airbus for us, if it is not American banks, it is EC banks. Russia is waiting to supply nuclear reactors. The French have offered nuclear submarines. All these countries are ultimately traders. Sanctions require principled business and not the principle of business.' S Gurumurthy on the Budget, swadeshi, sanctions, and, of course, Hindutva.
BRIEFS
High-level panel on
patent laws
June 13
BUDGET '98
Special import duty slashed, urea price hike withdrawn
Under pressure from disparate political
parties and farmers, Finance Minister Yashwant Sinha announced in the Lok Sabha concessions worth Rs 23 billion.
If Govt is going to amend its Budget, then where is its sanctity?'
Industrialists and economists analyse the impact of the import duty slash and the urea price rollback.
Roll back protectionist tariffs to avoid disaster: Chidambaram
The former finance minister said the latest erosion in rupee value and the special duty in the Budget would provide the Indian manufacturers almost 40-45 per cent price protection cover.
THE NUCLEAR CRISIS
US wheat exports to Pak to be exempt from sanctions
Step taken to protect farmers by retaining the third biggest buyer of American wheat as prices touch a seven-year low.
Sweeping Pak reforms to counter sanctions
The first measure will be to confiscate 1.25 million acres of land from some of the country's largest and most powerful land owners, the prime minister said.
BRIEFS
Sanctions not implemented: Hegde
June 12
Markets fear another Harshad scam
The big bull has allegedly been operating through his aides. "He bought the shares on credit, hoping to pay off once the price went higher and thereby making a neat profit. However, they did not go higher, and the financiers panicked and sought their dues. This caused the panic yesterday," said a broker.
RBI announces new measures for export credit
The regulating bank will also allow forward exchange cover for equity investment by foreign institutional investors for "incremental investments" with effect from tomorrow to stem excessive speculation.
Opposition blasts Govt over Maruti
Former industry minister Murasoli Maran held that both the posts of the chairman and the managing director had been surrendered to Suzuki Motor Corporation.
Rana Talwar is next StanChart CEO
Come October 1, Standard Chartered Plc will have its first ever Indian chief executive. And Talwar's taking over the top slot will signal a new urgency to
the bank's push for a greater share of the South Asian banking business.
NRI investment in housing 'woefully inadequate': Minister
The NRI investment in the sector was hardly Rs 3.65 billion during the last few years as against the requirement of Rs 1500 billion, Ram Jethmalani said.
ULCA repeal bill introduced
The Left parties, the Samajwadi Party and the Republican Party of India walked out of the House protesting against introduction of the
bill saying there was no national consensus on it.
Mahindra rides smooth in a bumpy year
In a year where industry spoke of recession, tractor giant Mahindra and Mahindra has posted an annual result that showed higher profits and improved income. The board also agreed to a higher dividend of 55 per cent.
New textile policy on anvil
The expert group will be chaired by S R Sathyam.
BUDGET '98
Budget is anti-NRI
The scrapping of the 'resident but not ordinarily resident' status, giving NRIs a tax holiday on earnings from abroad, is a retrograde step. So is the increase in the import duty on gold, argues eminent tax expert A N Shanbag.
Sanctions will not affect any project: Sinha
On the criticism that the Budget is silent on the sanctions, the finance minister said at best the US sanctions could have ''general
impact''.
Maran praises Sinha's IT proposals
The former industry minister wanted the new one-page income tax return filing forms to be printed in all state languages.
• Forex: Rs 42.31/34; The rupee depreciates even further, each low being a record against the dollar.
• BSE: 3335.76; The Sensex rose by 24.35 points as fears of a crisis subsided.
• NSE: 961.35; Nifty dips by 1.55 points.
June 11
Instead of a bang we had a whimper!
'What is the guarantee that, with Sinha holding the baton, the huge gaps between intention and implementation will not reoccur? Have any new hassle-free guidelines been announced to spur project implementation? No. This is the worry of private investors in infrastructure projects,' says Mahesh Nair.
SJM against reducing Govt stake in IA
Swadesh Jagran Manch all-India organiser S Gurumurthy also cautioned Finance Minister Yashwant Sinha on the dangers facing the economy.
OTHER BUSINESS STORIES
UP trying to copy Naidu's 'woo NRI formula'
Chief Minister Kalyan Singh seems to be convinced that his AP counterpart's innovative plan would work wonders for his backward state.
UF halted Maruti growth process: Bakht
Rejecting the Opposition's demand for his resignation over the patch-up with Suzuki Motor Corporation, Industry Minister Sikander Bakht said his predecessor had created an unfortunate situation wherein ''i am constrained to deviate from it''.
Govt warned against using FI funds to stabilise capital market
Noted economist P R Brahmananda said the inflation would touch 10 per cent on account of the budgetary proposals, adding that the Budget did not make any mention about borrowings from the RBI. "This is an open invitation to unlimited inflation," he said.
First perishable cargo centre set up
Commerce Minister Ramakrishna Hegde inaugurated the centre set up at the Indira Gandhi international airport in New Delhi.
Though the country's economy was primarily based on agriculture, exports of farm produce constituted only about 15 per cent as there was no proper facility for storing flowers, fruits and vegetables at airports.
Standard Chartered earns Rs 677 million profit
SCB Chief Executive in India Martin Fish said that the Bank performance was impressive at the operating level when viewed in the context of a generally dull
Indian economy.
• Forex: Rs 42.20/25; The rupee hits record low, then recovers.
• BSE: 3311.41; The Sensex tumbles 156 points.
• NSE: 962.9; Nifty slides 32.15 points.
June 10
Another roll of the die
'There are no ifs and buts in the Budget. Sinha does not mention, except in passing, the nuclear tests and the sanctions. He does not given an idea of what industrial growth is going to be like and whether inflation will be a problem. The finance minister is so self-absorbed that he either does not see the big picture or does not think it important,' says Jay Dubashi.
Automobile makers decry excise hike
The increase in excise duty from 25 per cent to 30 per cent on
multiutility vehicles was unjustified as these
vehicles primarily service the needs of the rural areas and
inter-city tour taxi operators. Such a levy would only further
depress demand, claim the automobile association.
OTHER BUSINESS STORIES
Happy days are here again! Industry on upswing
In 1996-97, profits after tax slipped by 10.3 per cent and with the fall in consumer demand, analysts were anticipating a further decline in profits for 1997-98. Instead, there has been a change. Profits have gone up 30 per cent, compared to last year's decline of 33 per cent, while sales increased 19.8 per cent whereas in 1996-97, it was just 14.8 per cent.
Opposition asks Bakht to quit over Maruti deal
Opposition leaders today demanded the resignation of Industry Minister Sikander Bakth, holding him responsible for what they called a corrupt deal entered into with the Japanese auto major Suzuki which clipped the powers
of the government in top appoinments in the state-owned Maruti Udyog Limited.
Goa set to get tough on financial crooks
The Congress government is planning to promulgate to protect the interest of the depositors, many of whom have been cheated by a number of financial firms that have cheated the innocent investors.
• Forex: Rs 42.22-24; The rupee smashed through the 42-mark, to reach its lowest ever level against the dollar due to heavy demand and short supply of the latter.
• BSE: 3416.73; The Sensex recovered from yesterday's roller-coaster ride to gain 51.34 points with the domestic institutions making purchases.
• NSE: 968.60; The Nifty rose by 26.45 points with a strong buying sentiment in the market.
June 9
Import duty will hit foreign investment, joint ventures
The swadeshi measure in levying import duty of eight per cent has made the country one of the most protected economies and the least foreign investor-friendly among the growing economies of Asia. The special additional customs duty would hit the foreign direct investor badly as most of the foreign direct investments have huge import components in their investment. It will also hurt joint ventures that are dependent on imports.
Common man will be hurt by the Budget's inflationary aspect
With excise duty rising to eight per cent, the prices of several items of
common consumption in middle and upper classes, such as branded tea, cheese, butter, ghee (clarified butter), meat, spectacle lenses and frames, cigarettes and pan masala will rise. The cost
of professional services such as real estate agents and consultants, architects and interior decorators will go up. And after the rail transport fare hike, now the duty on petrol will make road transport dearer.
Sanctions effect will be felt after a year, says Sinha
The finance minister rebuffed criticism that he failed to account for the sanctions and said his Budget was the first of its kind in the reforms era to go out of its way to recognise rural India and agriculture as central to the Indian economy.
Insurance workers hold rallies against planned reforms
About 200,000 insurance employees staged demonstrations to oppose the government's decision to open the insurance sector and resolved to stall the move through a powerful agitation. An LIC employees' leader said that by opening the sector, Indian companies will enter only in collaboration with foreign insurance firms.
OTHER BUSINESS STORIES
Japanese sanctions will not hit ongoing projects
The Japanese ambassador to India said that current projects in India and future human- and welfare-related projects will not be hit by the economic sanctions and also urged both India and Pakistan to sign the Comprehensive Test Ban Treaty and the nuclear Non-Proliferation Treaty.
Government, Suzuki resolve Maruti row
The government has signed a memorandum of understanding and settlement with the Suzuki Motor Corporation under which appointments of chairmen and managing directors of their joint venture, Maruti Udyog Limited, will be made only after mutual consultation. Suzuki has agreed to withdraw its international arbitration case against the government.
2 US firms to seek gas in Tripura
ONGC has awarded contracts to two American companies for gas
exploration in about 3,000 sq km area in northern Tripura. The state
has an estimated 400 billion cubic metre natural gas reserves.
Increase investment in agriculture, says chamber
The PHDCCI has suggested that the new agriculture policy to be announced by the government should aim at enhanced public investment with emphasis on infrastructure of irrigation and power, while giving priority to investment in soil and ground water conservation, forest denudation, and wasteland development.
• Forex: Rs 41.79-80; The rupee had dropped until the State Bank of India entered the market to salvage the level back to the previous close
• BSE: 3416.73; The Sensex reached a high, plunged 235 points, and then, remarkably, rose again to close just 1.16 points lower
• NSE: 968.60; The Nifty crashed by 24.90 points after a volatile day which saw an intraday difference of 65 points
June 7
Capital markets have missed positive
facets of Budget
The Sensex has been crashing because the markets have
been attaching undue importance to the negative aspects
of the Budget. It would be a matter of time before the
correction takes place, argues the Centre for Monitoring
Indian Economy.
'Swadeshi bark and videshi bite'
Congress joint secretary Jairam Ramesh said that the finance minister's duty proposal would push up the prices of all packaged farm produces like spices,
milk products, snacks, sweets and savoury items that are produced
and marketed by small units.
THE REDIFF BUDGET SPECIAL
Budget is a mix of the bold and the beautiful
No matter what critics say of Yashwant Sinha's budget, one thing has to be granted to the finance minister -- he has shown courage to introduce a number of pending schemes that his predecessors left on the back burner because of political pressures and the lack of will, writes Rajiv Shukla.
OTHER BUSINESS STORIES
'Impact of US sanctions is unimpressive'
Unilateral sanctions in the 1970s and 1980s succeeded in influencing target countries only 13 per cent of the time, compared to almost 70
per cent in 1945-1970, says the Centrist Institute for International Economics.
Indian businessmen seek review of sanctions
A delegation of leading Indian businessmen has approached the US congress
for a review of the recently imposed economic sanctions on India in the overall interest of Washington-New Delhi and investment relations. The delegation
said it wanted to give the impression that it was business as usual in India.
All pending power projects in Maharashtra cleared
A central power ministry team today cleared all pending issues
relating to new power projects in Maharashtra and also
substantialy increased the exposure limit for the Maharashtra
State Electricty Board from Rs 880 million to Rs 4.2 billion for
1998-1999.
Disastrous week at stock exchanges
The Bombay Stock Exchange Sensex plummeted by 228 points
to 3417.89 during the week ended June 5 on
the BSE, following large-scale bull liquidation by operators and
heavy off-loading by foreign institutional investors in the
index-based scrips on the BSE.
June 6
'It is the best possible Budget'
'It makes no tall claims but it is realistic, reasonable and
takes all key issues into consideration.' Nani Palkhivala evaluates the Budget in an interview with Pritish Nandy.
Budget does little to aid industrial recovery
'The single measure which can be considered as a sop to industry,
albeit a retrograde one, is the eight per cent increase in customs
duties on import of most non-capital-goods industries,' writes the Centre for Monitoring Indian Economy.
Goa heaves a sigh of relief at Budget bonanza
The state, acutely desperate for funds, will now get
Rs 45 million instead of the earlier anticipated Rs 30 million.
However, the money will not go towards development work but to
pay for the hiked salaries of 42,000 state staff.
Centre seeks to add 7.5 million to tax net
The Centre is aiming to increase the number of
income tax assesses through the new measures on direct taxes
announced in the Budget. The number of income tax asseeses
in the last financial year had gone up to 15 million from 12.5 million.
OTHER BUSINESS STORIES
'US firms face bleak future in India'
The US-India Business Council, in its first meeting after the imposition of sanctions, resolved that their effectiveness as an instrument of policy was limited for want of multilateral support. ''Too often business opportunities lost due to sanctions simply flow to other, more opportunistic competitors.''
Blasts, weak Budget, ratings review make FIIs panic
This was reflected in Sensex dropping a massive 128 points as FII began offloading their investments in India. In April 1998, FIIs sale was Rs 108 billion, in May it zoomed to Rs 6.13 billion.
No country has imposed sanctions to date: Hegde
The commerce minister said the economic sanctions
are a mere threat, while admitting that the country had
witnessed an export growth rate of just 2.64 per cent in 1997-98
against the target of 18 per cent.
Advantage foreign banks
The Reserve Bank of India has decided to permit foreign banks operating in India to remit their profits/ surplus to their head offices without the approval of the apex bank.
• Forex: Rs 41.78-80; Massive selling of dollars by the leading commercial bank, the State Bank of India, held the spot rupee steady
• BSE: 3417.89; The Sensex plummeted a huge 128.32 points with FIIs offloading their shares
• NSE: 993.50; Nifty falls a huge 33.5 points with FIIs selling shares by the thousands
June 5
Budget lacks fiscal discipline
The gross fiscal deficit is budgeted to reach 5.6 per cent of the gross domestic product in 1998-99.
Given that most Budget proposals are optimistic and the current one does not show any signs of being different, the likelihood of the deficit turning out
to be much higher is distinct, warns the Centre for Monitoring Indian Economy.
S&P expresses concern at fiscal deficit
Standard and Poor said it was satisfied at the thrust of the Union Budget on infrastructure but felt sceptical about the fast implementation of projects cleared by the Union government to counter economic sanctions.
Insurance unions opposed to a role for private sector
Six trade union have decided to agitate against the government's decision. They claimed that the new move for providing
better insurance cover and mobilising resources for infrastructural development sounded "hollow and meaningless."
OTHER BUSINESS STORIES:
US won't ask others to slap sanctions on India
Assistant Secretary of State for South Asian
Affairs Karl Inderfurth said, ''We do not wish to make international pariahs out of either India or Pakistan. We believe the purpose of these sanctions should be to influence behaviour, not to punish simply for the sake of punishment.''
Alcan finally beats Sterlite to win Indal
Financial institutions agreed to sell their shares to Alcan at Rs 200 per share while the Sterlite offer at Rs 221 per share floundered follwing certain announcements by SEBI.
Jalan seeks patent intermediaries between science and markets
The RBI governor has suggested the need to develop intermediaries
like patent agents and attorneys to bridge the gap
between the scentists and the markets since in the global regime represented by Trade-Related Intellectual Property Rights, the benefits of innovation is in favour of the private
innovator.
Trade deficit at $8.77 bn for April 1998
The trade deficit in April last year $5.1 billion for the same month
last year compared to $8.77 billion. For April 1998, imports
are estimated to be $3.45 million, 13.93 per cent higher than
the $3.03 billion April 1997.
• Forex: Rs 41.78-80; Rupee steady
• BSE: 3546.21; Selling by domestic institutions pushes Sensex down
51.77 points
• NSE: 1019.60; Nifty loses 6.90 points
June 4
Govt keen to encourage NRI investment, says Sinha
The finance minister stated that the BJP government was keen to encourage non-resident Indians in the development of the country and to give dual citizenship to them. However, there were many legal complications, and as a first step, the provision of the Persons of Indian Origin cards has been made.
Budget might pave way for foreign insurance companies
The delays in opening the insurance sector have no rational justification. It is a poor comment upon our policy process that the labour unions of existing insurance companies have been able to delay things for so long. The announcement in this Budget is obviously a good idea; it is better to have private insurance companies competing in India instead of having public sector monopolies, says Ajay Shah.
'Budget is growth-oriented'
'It shows a very balanced approach, and is very pragmatic
compared to last year's dream Budget,' says Dr S P Gupta, chairman, Society for Economic and Social Transition.
Budget aiming at 6.5% growth, says Ahluwalia
The finance secretary said the eight per cent counterveiling
import duty was not in contravention of the World Trade
Organisation agreement and will affect only one-third
of the imports.
Kerala hails forward trading in oils
Equally well-received is the 100 per cent increase in the duty-free baggage allowance - there has been a long-standing demand from the NRIs in the Gulf. So is the raising of the limit for secondary market investment by non-resident Indians.
Sinha's remarks during urea debate causes opposition walkout
Finance Minister Yashwant Sinha's remark that the opposition's protests against the increase in the price of urea was only an attempt to derive
political advantage led to the walkout.
OTHER BUSINESS STORIES:
World Bank puts off two more loans to India
Tuesday's step by the Bank's executive directors postponed
$ 206.4 million in loans. Last week, the Bank delayed four
loans totalling $ 865 million after the United States, Japan
and Canada urged no action on the money.
Pak may declare moratorium on debt repayment
The government may also devalue the Pakistani currency by
three to five per cent to discourage imports that are further draining
the economy.
• Forex: Rs 41.78-80; Rupee loses by 3 paise
• BSE: 3597.98; UTI rescues Sensex after steep plunge, rises 24.77 points
June 3
Government rolls back hike in excise duty on petrol, halves urea hike
Apparently stung by the criticism that the 17 pc hike in petrol prices announced by Finance Minister Yashwant Sinha in his Union budget, was anti-people, the government on Tuesday rolled back the hike, even as it retained the additional tax of Re 1 per litre. It also announced that the price of urea would be increased only by 50 paise and one rupee as announced yesterday.
'The opening of the insurance sector will send a powerful signal which will attract all kinds of investments'
'It is a growth-driven Budget, the impact of which will be felt not in the short term, but in the medium to long term,' argues Coopers & Lybrand chief J Rajagopal. 'The primary reason for this is that the main engine for growth is the infrastructure sector which, as you know, has a long gestation period.'
'Budget is not very strong on swadeshi'
'What is disappointing is that nothing has been done for the automobile sector. The same can be said about the capital goods industry.' Vinod L Doshi, chairman, the Premier Automobiles Limited, analyses the Budget.
'The good work done by the earlier two finance ministers seems to have been continued'
'We are absolutely sure that the process of liberalisation will be taken a step ahead
in the right direction, benefitting the country in general,' A N Shanbag talks about the changes in income tax.
'No special policy package to revive capital market'
'The Budget is pro-farmer and pro-rural -- the allocation for
agriculture, irrigation, water supply, and housing received a big boost,'' says Dr U Shankar, director, Madras School of Economics.
'The Budget is pedestrian and lacklustre'
'It cannot help revive the economy nor can it impart any buoyancy to the stock markets,' said former Union minister N K P Salve. 'I must concede that it is easier to sell
socialism at the hustings than making a free market economy acceptable in a
democracy.'
'In one sentence, it is an absurd Budget'
'It does not say a thing about which direction he wants the economy to move. There is no reference to actual or postulated rates of saving or capital formation, or to any projections with growth in agriculture and industry.' says former West Bengal finance minister Ashok Mitra.
'The policy on PSU disinvestment is the most striking feature of the Budget'
Larsen and Toubro director Y K Deosthale feels that since the government has given Indian industry time to face the competition, it should utilise this opportunity to substantially increase its presence in the global scene at the earliest.
Many concessions to film industry
The customs duty on the jumbo rolls of cinematographic film has
been reduced to 10 per cent from the present 25 per cent and is
bound to give relief to producers purchasing raw stock for their
films.
OTHER BUSINESS REPORTS:
Sanctions may cause increase in child labour
About 20 million children are likely to be affected if aid to programmes for primary education and elimination of child labour are frozen.
Sanctions won't hit ongoing projects, says Karnataka CM
While expressing happiness at the tests, he wondered whether atom bombs could solve the country's problems.
Indian exports account for just 0.6% of global trade
Commerce Minister Ramakrishna Hegde blamed recession in many
countries in Southeast Asia, including Japan, supply-side constraints
in some sectors, slow erosion of competitiveness, and slow industrial
growth.
• Forex: Rs 41.72-75; Rupee loses by 3 paise
• BSE: 3573.21; Sensex drops another 69.47 points
• NSE: 1019.60; Nifty loses 34.15 points
June 2
Budget seeks to boost NRI, FDI inflows
Presenting the BJP government's first Budget, Finance Minister Yashwant Sinha increased the outlay for the infrastructure sector substantially. The agriculture sector plan outlay has been increased by 58 per cent, atomic energy plan allocation by 68 and the department of space by 62 per cent.
The FM inquisition
Three former finance ministers -- Madhu Dandavate, Manmohan Singh and P Chidambaram -- hauled Yashwant Sinha over the coals during a television interview. While Manmohan Singh felt it 'is a half-Budget', Chidambaram said it is 'a timid effort with no big ideas'...
Govt to divest stake in Indian Airlines, Indian Oil
The government will disinvest specified
portions of equity from Indian Oil Corporation, Gas Authority of India Ltd, Videsh Sanchar Nigam Ltd, and Concor. Indian Airlines will be restructured to undertake a phased disinvestment over three years, bringing the government's equity holding down to
49 per cent.
Allocation for education up 50 per cent
The outlay has been increased to Rs 70.47 billion for the current
year from Rs 47.16 billion in the previous Budget.
14 per cent hike in defence allocation
The Defence Budget for 1998-99 was pegged at Rs 412 billion, 14 per cent more than the revised estimates of Rs 360.99 billion for the previous year.
Agriculture allocation up 58%
The government plans to introduce futures trading in edible oil,
oil seeds and their cakes.
IT rate stays, but exemption limits up
The level for income tax exemption has been increased from Rs 40,000 to Rs 50,000, standard deduction from Rs 20,000 to Rs 25,000 for income up to Rs 100,000. No change has been proposed for salary earners having income between Rs 100,000 and Rs 500,000.
Rs 90 billion for subsidies, up Rs 1 billion
The sugar subsidy has been retained at Rs 4 billion while the
subsidy on indigenous nitrogenous fertiliser has been reduced from Rs 66 billion to Rs 60 billion.
Petroleum products prices up
The cost of petrol in the four metropolitan
cities of Bombay, Calcutta, Delhi and Madras will range between Rs 26.77 per litre to Rs 31.36 with immediate effect.
12 new service taxes
The taxes have been levied on architects, interior decorators, management consultants, chartered accountants, cost accountants, company secretaries, private security services, real estate agents and real estate consultants, market research agencies, credit rating agencies, underwriting agencies and slaughter houses using mechanised means for large animals.
Non-lapsable fund for North-Eastern states created
Funds will be deposited in the pool from all the ministries where
the plan expenditure on the North-Eastern region is less than 10 per cent of total plan allocation of the ministry. The difference
between 10 per cent of the allocation and the actual expenditure
incurred on the North-Eastern region will be transferred to the
pool.
'This disappointing Budget ignores India's changed economic environment after the nuclear explosions'
'The finance minister should have shown leadership and imagination and
should have introduced measures to suggest that we are prepared to face
the new world,' says Dr Arjun Sengupta.
'The opening of the insurance sector does not necessarily exclude foreign participation by means of joint ventures with Indian companies'
'The battle is not yet lost, but it will remain an uphill battle and things like the bomb
doesn't help. India must create an image in the international investor community as a safe, yet
attractive long term investment,' says George Otto, Chief Representative, Allianz AG, a leading insurance company.
'The Budget is inflationary and will hit the poor sections'
Prof Madhu Dandavate, former finance minister, says the effect of sanctions were not taken note of and says that whether sanctions will come in or not depends upon how India conducts itself.
Sinha aiming to widen tax base
Many new schemes such as Saral, Samman and Samadhan have been introduced.
An inflationary Budget which will not encourage consumer spending
Businesswoman Kiran Majumdar Shaw feels it is a disappointing Budget which really does not promise to "kick-start" the economy or, for that matter, infuse investor confidence as is evidenced by the drop in the stock market.
'The Budget is probably going to be a fiscal disaster'
Economist Ajay Shah points out that there is too much spending in the Budget, with projections based on a 14 per cent nominal growth in GDP. That is hard to obtain in the best of times, needing 6.5 per cent inflation and 7.5 per cent GDP growth.
'It is a very supportive Budget'
Captains of industry have warmly welcomed the Budget and its provisions.
'Indian industry must be made to face global competition'
Rajesh Shah, CII president, hails the Budget which creates conditions for capital expenditure for infrastructure sector.
Sinha hopes energy, transport outlay will fuel growth
The plan outlay for the key infrastructure sectors of energy, transport and communications has been raised by 35 per cent to Rs 611.46 billion from Rs 452.52 billion.
'The vulnerability of the Budget is likely to be revealed by the impact of the excise and customs burden'
'Certainly, this will create cost pressures on certain segments of
industry and may aggravate inflationary pressures. In recent
weeks, the inflation rate has been going up -- it is already around 6.4 per
cent on a year-on-year basis,' says S S Bhandare.
• Forex: Rs 41.69-72; Rupee holds almost steady
• BSE: 3642.68; Sensex plunges after Sinha presents Budget
• NSE: 1053.75; Budget wipes out early Nifty gains
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