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|February 28, 2001||Feedback|
'Hope the government will be able to implement this Budget'
Dr Shubhashis Gangopadhyay
Finance Minister Yashwant Sinha has come up with a good Budget. I hope the government will be able to implement it
He has managed to keep the fiscal deficit at 5.1 per cent, as a percentage of GDP, as budgeted. However, the government is facing problems implementing the recommendations of the Fifth Pay Commission and will continue to do so.
While subsidies for the so-called poor farmers remain, those who really need the subsidies continue to be denied the same. However, there is a possibility that proposed reforms in the power sector will lead to farmers paying for the power they use, which is a good sign.
Poverty has come down, though this might be more due to continued growth rather than direct poverty alleviation programmes.
This Budget should not have a direct effect on inflation. However if growth picks up, prices are likely to stay stable as there is a lot of unutilised capacity at the moment.
It has addressed the crucial issue of infrastructure development and is likely to attract investment in this sector.
With companies having been freed of every surcharge (except the quake-related one), the money thus saved may be reinvested in new businesses, which will generate fresh employment opportunities.
Steps like lowering of excise duty on cars and increased duties on imported cars (second hand) should kick start the automobile industry, which was in the doldrums.
At the same time, the IT sector, which has been witnessing robust growth over the last few years, should not depend on government policies to continue growing.
The Budget is free of inflation-inducing measures, which is of great comfort to the salaried class. A disconcerting note for the latter, however, is that edible oil prices are likely to go up.
Dr Shubhashis Gangopadhyay is professor of economics at the Indian Statistical Institute.