Budget has no proposals to ‘spur consumption and lacks a feel good factor’
Union Finance Minister P. Chidambaram’s budget for 2013-14 has been termed lacklustre by a cross section of industrialists in Karnataka. Most of them agreed that the Minister’s compulsion to rein in the fiscal deficit had constrained his options. All were disappointed that there was no announcement about the implementation of the Goods and Services Tax.
Speaking at a viewing session organised by the Confederation of Indian Industry (CII), Chiranjib Sen, an economist at Azim Premji University, said, “The objective of fiscal consolidation may be laudable, but it ought not have been placed on an altar.” He said Mr. Chidambaram ought to have initiated a fiscal stimulus to address the economic slowdown.
Although the Finance Minister spoke about developing rural infrastructure, “nothing noteworthy has been done,” complained M.R.S. Viswanathan, managing director, John Fowler (India) Pvt. Ltd. S. Chandrashekar, managing director, Bhoruka Power, said although the Finance Minister had emphasised the need for scaling up power generation capacity, he had not reduced the import duty of liquefied natural gas.
A.M. Muralidharan, managing director, Volvo-India Pvt. Ltd., said investors were not backing out of infrastructure projects only because of delays in getting clearances but because of rising project costs, especially the cost of finance. He said his company may benefit from the increased funding for the JNNURM.
The budget had no measures to “spur consumption and lacks a feel good factor,” said Bijou Kurien, president, Reliance Lifestyle Holdings. Inflation, a key issue, has not been addressed, he complained.
Kiran Mysore Vivekananda, regional manager, HCL Infosystems, said there was nothing for the IT sector.
Jehangir Ardeshir, president and managing director, Terex India, a subsidiary of a multinational conglomerate engaged in the manufacture of construction equipment, said the expectation that the budget would act as a “force multiplier” for the infrastructure sector had been belied. “New road projects do not have takers because investors are not confident that issues related to land acquisition will be resolved expeditiously,’ he said. Instead of focussing so much energy on issues such as the entry of foreign companies in multi-brand retail, the government ought to pay more attention to issues such as developing irrigation infrastructure, cold chains and power generation and fuel supplies,” Mr. Ardeshir said.
Commenting on the move to establish a bank for women, L. Krishnan, chairman, Karnataka State council, Confederation of Indian Industry (CII), said, “It would have been far wiser to have used the existing banking infrastructure to lend to women entrepreneurs.” This would have been far quicker because it would take time for a new bank to scale up operations.
M. Lakshminarayan, president, BCIC, said the budget, contrary to expectations, “was neither reformist or populist.”
The only industry association to express unwavering appreciation came from the Federation of Karnataka Chambers of Commerce and Industry (FKCCI). Its president K. Shiva Shanmugam said the budget aimed at inclusive and sustainable growth by keeping the fiscal deficit in check.