Reactions to Budget 2000 from corporate and industry chamber heads in Pune vary from positive to cautious to negative. An interesting mix that comes together to give a holistic reaction to the proposals presented by India's finance minister, Yeshwant Sinha, in parliament today.

Chairman of Finolex Group of Industries, P.P. Chhabria, says the budget will have a positive impact on some sectors. "The budget," he says, "will promote growth in agriculture, biotechnology, food, IT, power, and telecom. These areas will bring in a lot of expansion in the coming years. The thrust on basic areas like roads, infrastructure, water, and developing the rural base of the country are growth-oriented. The finance minister's focus on strengthening the forex position by relaxing GDR-ADR norms and bring in $ 10 billion by 2001 into the country will contribute to growth."

Overall, he seems to find the budget positive. "Funds for rural development, national highways, infrastructure, ports, all show signs of a progressive budget, as does reducing government holding to 33 per cent in banks. The Finolex group will benefit from the tax and duty rationalisation, especially on optical fibre and plastic."

Atul Kirloskar, managing director, Kirloskar Oil Engines Ltd., takes a balanced view of the budget, seeing some positives, some acceptables and some negatives. He agrees that the budget will result in the growth of information technology, telecom, and entertainment industries. He welcomes the liberalisation of the regulations for venture capital, and excise simplification and single rate. "But change related to the special excise is unclear. Implementation has to be sincere. And, interest tax abolition is welcome."

On direct taxes, "increase in surcharge on corporate tax to 15 per cent is understandable," he says. "Tax on export profit at 20 per cent and phasing out of such incentive in is acceptable. But it is not clear if the present export-related tax-free schemes will continue or not." However, he says, it is not clear if the present export related tax-free schemes will continue or not.

He has mixed feelings on expenditure. "Increase in defence, plan expenditure, rural development, power, roads are welcome steps. The infrastructure needs a boost. Removal of approval for Voluntary Retirement Scheme will facilitate quicker restructuring of industry. The bank sector reforms are welcome. But I am disappointed that the fiscal deficit has not been adequately addressed; the interest payment as a percentage of deficit is alarming. And reduction in the subsidy by raising the fertilizer prices is a tough decision for the government, but is necessary."

Madhur Bajaj, president, Bajaj Auto Ltd., takes a balanced view as well: "After all the rhetoric, we did not see much by way of harsh measures. It is
good to see that the finance minister has focussed on social sectors like education, rural development, with slight increase in allocation. Otherwise there is nothing much that is growth-oriented, especially in the automobile
and two-wheeler sector." Bajaj's budget assessment on the whole: "Overall, it has been disappointing."

Pratap Pawar, president, Mahratta Chamber of Commerce, Industry & Agriculture, Pune, says frankly, "The Budget this year is no different from last year, and shows the same potential for growth. While the boost to the IT sector will add to better performance, simplification of excise will hopefully lead to less government interference. The fiscal deficit too is on the same lines as last year. From the measures he proposes, there is a limit to the resources the finance minister can raise. Although he has mentioned the introduction of a VRS for government employees, I don't see the political will coming. So unless he shows its implementation, it will not come to much."

Arun Firodiya, chairman, Kinetic Group of Companies, takes a rather negative view of Budget 2000. He starts with: "Without seeing the notification, it is not clear if there are any changes in excise duties in the automobile sector." And then adds strongly, "It is all very well wanting to reduce exemptions, but the point remains that it is a rather disappointing budget. With fiscal deficit at over 1,11,000 crore (it could go up to 1.5 lakh crore at the end of the year), subsidy at Rs 20,000 crore, the number of government employees continuing to rise and expected to go up to 38 lakh, there is no serious effort to reduce government expenditure."

And, more strongly, "This is a populist budget more suited to a pre-election year than a post election year. There is no serious or concrete effort to give new thrust to the economy. There is nothing positive in that direction. So if inflation does not rise, it will not be because of the budget but in spite of it. The raising of tax on dividend from 10 per cent to 20 per cent is not a good thing. Companies will be tempted to reduce dividend payout, which will discourage people from making investment in stocks."