New Delhi: In the second term of the UPA, Finance Minister Pranab Mukherjee got full marks for presenting a placid budget that offers nothing new in the middle of the UPA II term and its failure to bring back black money, as mixed reactions poured in from various quarters. 

Except for raising the income tax slab by Rs 20,000, the common man has nothing to cheer and India Inc that needs government largesse was by and large smiled all the way to the board room.

While the Ministers praised the ‘balanced’ budget, the Opposition criticized it for failing to meet the aspirations of the ‘aam admi’ and failure to contain inflation while most of the fence sitting India Inc, experiencing boom time and at the same time in trouble for scams and market upheavals watched the budged with awe.

FM gets the pat
Prime Minister Manmohan Singh said the Budget was aimed at consolidation of fiscal deficit and moderation of taxes. Fiscal deficit was brought down from 5.5 percent to 5.1 percent due to Rs 1.08 lakh crore sale of 3 G spectrum.

On the controversial black money issue and lack of any amnesty scheme in the Budget to bring it back, Singh said there have been such schemes in past that have yielded little success. "I don't think they have succeeded in providing permanent cure for black money. We need to have a systematic reform in a holistic manner to deal with this menace," he said.

Congratulating Finance Minister Pranab Mukherjee for doing a "commendable" job, Singh said, "You cannot please all the people. The Finance Minister has done as good a job as possible."

"This is the Budget which meets all the challenges of our economy… a determined effort to curb inflationary expectations," Singh said in an interview.

PM’s junior, Home Minister P Chidambaram termed the budget as “good” and "balanced".

"The Finance Minister has focused on high growth; on investing in, incentivising and increasing agricultural production in order to moderate inflation; and on fiscal consolidation," Chidambaram said."We are very happy and I compliment the Finance Minister on presenting a good and balanced budget.”

Telecom and HRD minister Kabil Sibal welcomed the increased allocation for education as well as telecom sectors in the Budget.  He said the interest of the common man had been taken care of.

Sibal said he was happy with the increased budgetary allocation of Rs 52,000 crore for the education sector and around Rs 25,000 crore for the telecommunications sector.

Sibal said the 'aam aadmi' is being looked after in the Budget and so many steps are being taken for fiscal consolidation.


… and the criticism

Meanwhile Opposition dubbed the Budget as "futile" and "directionless", saying it brought no relief to the common man and nothing has been done to contain inflation.

Trashing it as a "futile exercise", senior BJP leader Anant Kumar said it has no proposals to contain rising prices and offered no succour to the 'aam aadmi'.

Former Finance Minister Yashwant Sinha said it is "completely devoid of reforms" and “timid”.

Another BJP leader Rudra Narayan Pany termed it a "clear-cut election Budget" which indicated that the Government could go for mid-term polls.

CPI leader Gurudas Dasgupta said the Budget was "directionless" and did not reflect any seriousness by the Government to address the issue of unemployment or keenness to mop up additional resources and taxing rich people.

"It's a nominal Budget with no direction. This is a directionless Budget in which no efforts have been made to raise additional resources and taxing rich people. No attempts have been made to increase employment in the Budget. It is a thoughtless exercise," Dasgupta said.

Terming the Budget as insensitive, CPI(M) leader Nilotpal Basu alleged that a large number of poor people were excluded from subsidies.

"Where is the question of inclusion in this Budget? The government is taking cue from the global finance regime," Basu said.

BJD MP Jay Panda described it as "mixed Budget" but rued that "no steps were taken by the government to contain inflation".

Asked if the Budget was presented with an eye on the forthcoming assembly elections in five states, SP spokesperson Mohan Singh said, "It may be even aimed at the general elections."

JD(U) chief Sharad Yadav said the Government has not proposed any steps to bring back black money or to fight corruption.

"Even the Rs 25,000 crore given for the anti-Naxal operations does not seem to be adequate," he added.

RJD Chief Lalu Prasad, however, said he was "happy" about the Budget but would be happier if certain bills proposed in it come through.

India Inc smiles and frowns
Expressing satisfaction over the various proposals of the Budget, Godrej Group Chairman Adi Godrej said: "I think it was a very well balanced Budget and growth oriented. It will be very good for the economy. The decision to formally introduce the constitutional amendment for GST is a very good one."

He said increase in limit for income tax exemption for tax payers will add to consumption "which is desirable".

While welcoming the reduction in surcharge for companies from 7.5 per cent to 5 per cent, Godrej, however, said: "It is desirable, although I would have liked to see surcharge completely removed.”

Terming the Budget as balanced, HSBC India Country Head Naina Lal Kidwai said: "The Finance Minister has allowed the growth agenda to stay on track."

She also said the Budget has also set the direction for financial sectors reforms with Mukherjee promising take forward many pending Bills in Parliament soon.

FICCI President Rajan Bharti Mittal said the Budget is balanced and will sustain the growth momentum, while giving main emphasis on agriculture and manufacturing.

However, not all industries were happy with the Budget proposal, specially those in the iron ore mining sector which will now have to pay 20 per cent export duty.

"Iron ore industry will not be able to absorb it (export duty 20 per cent). It will affect export earnings of the country," Roongta Mines Ltd President Siddharth Roongta said.

Principal Economist for Deloitte in India Shanto Ghosh said: "Overall, the policy prescriptions outlined in the Budget were lacklustre and can be considered more of tinkering around the edges without ushering in radical reforms."

Ghosh, however, said the commitment to refrain from additional borrowing to fund the fiscal deficit will certainly help retain the momentum in terms of private investment that is critical to sustained growth.

Motilal Oswal Joint MD Ramdeo Agarwal said no increase in excise rates has boosted market. "Auto and banking  sectors are clear winners in Budget."


JPN/Agencies