This budget goes on to prove present government's pragmatic approach instead of a populist one. Mr. Pranab Mukherjee has chosen a very balanced approach in devising the Budget for 2010-11.
Though there are not too many big bang reform-centric announcements, what has come as a relief to the markets is the absence of major negatives, barring the hike in MAT, increase in excise duties and increase in the levy of oil prices.
Despite higher social spending, the government did not overshoot its FY10 fiscal deficit target of 6.8 per cent by too much. Also the government has announced a road map to bring down the deficit in coming years with FY11 target at 5.5 per cent.
The focus of the budget on rural infrastructure, other developmental and employment generating schemes in rural India will ensure continuation of rural consumption demand which will help in economic growth.
I expect the realty and infrastructure sectors to gain from this budget. The infrastructure sector shall get benefited from higher government allocation and from the proposal of a deduction of Rs.20,000 towards investment in infra bonds. The realty sector would also benefit from continued focus on strengthening existing affordable housing schemes, extension of tax exemption period for real estate projects from existing four years to five years and extension of 1 per cent interest subvention scheme on housing loan. All such measures will have positive impact on the real estate sector.
To summarise it, I will say that overall the budget has been positive for all the sectors. Though the finance minister has laid emphasis on consolidating the economic recovery, improving investment environment, inclusive development, strengthening transparency and public accountability, however it will be a tight rope walk for the government to deliver its promise of inclusive growth."