The Finance Minister has attempted a miracle and in the first reading, seems to have pulled it off: an all-round feel good without any palpable pain. Without hiking taxes and fiscal deficit, the budget provides for immediate and long-term growth. The budget has made industry happy, capital market bullish and the rural sector hopeful while the tax payers heave a sigh of relief.

The budget is directional in many crucial areas: fiscal deficit, interest regime, labour market, subsidies, government downsizing and customs duties. For the immediate, focus is on infrastructure and agriculture - two sectors that can spur all-round economic growth. The outlay for national highways and Gujarat relief will provide an immediate impetus with a multiplier effect.

With the de-freezing of administered interest rates, we can expect a shift of funds from low risk savings to instruments of investments, to the capital market and industry. With this, the Indian industry can improve its competitiveness - a better option than raising the protectionist tariff wall.

The long term issues on reforms have been emphasised although these are only promises and perhaps, implementation will be tougher than the statement of intent. But then, there is the action taken report, introduced this year : a welcome step in transparency whereby the Finance Minister dares to hold himself accountable. He has also fullfilled his commitments by abolishing temporary taxes. The direct tax quantum has been protected without increasing the tax rates but by correctly enlarging the base of the pyramid.

The expansion of the service sector base is a prelude to VAT and assuages the States' apprehensions of loss in revenue what with compensatory increases in Central allocation to States. Here, I would have wished a clear articulation on the introduction of state level VAT. The basket of sops for food processing sector will largely benefit the small scale units and will help dispersal of this activity to the rural sector with down-the-line boost from bio-technology.

For the automobile industry as a whole it has been a perfect answer to the wish list. Excise duty has been reduced on cars and two wheelers. Depreciation has been increased on commercial vehicles and high tariff has been imposed on second hand vehicles. This will certainly stimulate growth.

For the commercial vehicle industry there are two disappointments: the Government has not used the legitimate instrument of weighted deductions on R&D spend by Indian industry at a time when it is trying to bridge the technology gap with the world. The proposed 8% excise duty for CNG is set back for eco-friendly technology.