Mumbai: India’s government paraded its economic achievements on Monday and promised help for the rural sector as it tried to shield the economy from a global credit crunch and stem job losses with elections just weeks away.
Acting Finance Minister Pranab Mukherjee began charting spending plans for the 2009/10 fiscal year from April to July, a stop-gap measure to take care of essential spending during and in the immediate aftermath of general elections.
Following are comments from company officials and fund managers on the budget:
Paban K Kataky, director Exide industries:
“There was nothing announced in this budget for the (auto) sector. We are concerned about the fiscal deficit which is very high. Until and unless rates come down further and banks go easy on giving loans, situation will remain the same.”
Venu Srinivasan, chairman TVS Motor Co:(to NDTV Profit)
“The government has continued the interest subsidy. I mean what else can you expect from this budget...the interest subvention has been continued till September and there is enough time for the new government to come and take steps which are positive for the auto sector.”
Sajjan Jindal, vice-chairman & MD JSW Stell: (to NDTV Profit)
“In a poll done at Assocham it came out that people were really not expecting much out of this interim budget.. also the government has taken steps in the past, and ... the global economy is going through a very dificult phase ... “Overall people were prepared for this kind of a situation after the budget”
Nandan Nilekani, co-chairman Infosys Tech: (to CNBC TV18)
“(It was) more of a report card on the government in the last five years than any specific new proposal. Anything which has a new dimension will probably come in only after the new government comes in.”
Ashank Desai, founder and non-executive director Mastek Ltd
“It is a vote on account, so there was no great expectations from it. There are two things which are good here. The first is there is a lot of focus on higher education.
“The IT industry is very much dependant on higher education. Secondly, the outlay for urban infrastructure has been doubled. This is welcome. However, we are concerned about the 6% fiscal deficit.”
Mehul Choski, MD Gitanjali Gems Ltd:
“The budget was not at all up to the expectations. They have not addressed number of issues hurting the industry. Dollar, gold availibility is just not there. It is a large industry and they need to address the problems.”
D K Joshi, principal economist Crisil, Mumbai:
“There is a significant fiscal slippage and it is worrying that it is expected to be high despite lower subsidies, which is because of higher spending in infrastructure and the social sector. It looks like there is no scope for fiscal correction.
“Since the stimulus is huge, the government must at least ensure that the funding is done efficiently.” “We expect the central bank to continue monetary easing and a cut in repo and reverse repo rates by 50-100 basis points cut is likely before April.”
Sachidanand Shukla, economist at Enam Securitiies MUMBAI
“With the combined fiscal deficit...there is no room for more fiscal measures. Whatever government comes in after the election, will have to raise its plan expenditure significantly.
“It has also said the expenditure on rural employment program has been raised, but we will have to wait for the new government and a full budget to actually form a clear view on all these.
“Most of the things that they had to do has been done outside the budget already.”
Ramanathan K, Head- fixed income ING investments:
“Concern on higher spending to sustain growth momentum remains. Government bond supply pressures will continue to drive volatility in the bond markets. Rate cuts by the RBI and support from the RBI to stabilize bond yields remain the silver lining.”
Pradeep Jain, chairman Parsvnath Developers:
“It was completely (a) non-event. It was (more a) political statement than (an) interim budget. There was nothing for any sector, forget about real estate,” Chairman said.
Uday Kotak , director and MD Kotak Mahindra Bank:
“Acting finance minister Pranab Mukherjee has stuck to what is good convention.”
S Mahalingam, TCS ED and CFO:
“There were two stimulus packages given in the past couple of months and they were going to stay as they were. “I am disappointed.”
Chanda Kochhar, MD and CEO ICICI Bank:
“What is important is to propel consumption mainly through cuts in interest rates. Somehow it does not seem to be happening.”
But there were some supportive of the government, like Prabal Banerjee, Hinduja Group CFO pointed that government did not have much of a choice, “They did what they could best do.”
R C Bhargava, India chairman Maruti Suzuki:
“The Government has given (a) very clear direction that... they (Government) want to create jobs, they want investment in rural sectors, which would create demand for cars, two-wheelers and commercial vehicles as well.” A risk has to be taken and as inflation is coming down, a fiscal deficit to that level is justifiable also, he added.
Rakesh Bharti Mittal , vice-chairman Bharti Enterprises:
“It (budget) was on expected lines. We will have to wait for the new government and the final budget. It was supposed to be an interim budget so it has turned out to be an interim budget. Some steps can be taken outside the budget also.”