Comments on the Budget from key business leaders:
R. Ramaseshan, MD and CEO, National Commodity and Derivatives Exchange of India (NCDEX):
The focus of this budget has been to create an enabling environment for achieving the targeted growth of 7.5 percent in 2012-13. Both the Economic Survey (2011-12) and Union Budget (2012-13) have emphasized on growth propelled by revival of the industrial sector which is very good as it will add to the business confidence and give a greater sense of purpose to various sectors of the economy.
Agriculture, for instance, will most likely receive a boost with the extension of the viability gap funding to irrigation and fertilizer sectors. The agriculture sector is also going to benefit from the incentives given for warehousing. The targeted allocation of Rs. 5000 crore under RIDF for creating warehousing facilities is a welcome move. The rationalization of various schemes for agriculture under 5 main missions should help targeted support for these missions.
Since no growth can happen without adequate resources, the budget has rightly concentrated in adding vibrancy to the capital markets by simplifying the process for applying for Initial Public Offers (IPOs), allowing QFIs to access Indian corporate bond market, raising FII investment limit in government bonds, among other measures.
One area of concern is the fiscal deficit which has reached a high of 5.9 percent of the GDP in the current financial year thanks to the growing subsidy burden. It is imperative to contain deficit before it goes out of control. It was reassuring that the budget has reiterated the Government’s determination for reining in fiscal profligacy by aiming to restrict the subsidy to GDP ratio to 2 percent in the coming year. We hope this will be adhered to as will the intent of improving the delivery system which will help to plug in the leaks in the system of public distribution.