Budget 2010-11

The budget for 2010-11 is neither growth oriented nor imaginative. It also lacks direction in which the economy is expected to move. The positives of the budget are the tax benefits passed on to income tax payers,some social security measures and minor concessions here and there in some areas which can at best take care of increases in costs on account of inflation. The negatives in the budget particularly the increase in excise duties on petroleum products, however ,offsets the positives and will have adverse impact on the economy in the form of inflation because of its cascading effect all around.
The expected budget deficit and containment of Government borrowings are only expectations and in the absence of any incentives/motivation to attract long term investments in the areas of industry,agricultural and exports how far they are achievable is a major question without any answer in the budget. The steps to contain the present and future inflation are not figuring in the budget.On the contrary the inflation can further move up with more money in the hands of tax payers, increase in fuel prices and not so impressive support system for growth in agricultural and industrial production provided in the budget.

Dr.T.V.gopalakrishnan

(Edited version of this appeared in Business Line dt27/02/10)