Hopes ride high, post-Budget

Expectations from Budget were too high'
TOP corporate leaders from India Inc are expecting finance minister Pranab Mukherjee to announce key policy decisions in the coming months so as to put the country back on the fast track of economic growth. They said the expectations from the Budget were too high, considering the government had won the elections with clear majority.
    Participating in a panel discussion held at ET NOW's studios in Mumbai and New Delhi, KV Kamath, chairman of ICICI Bank, said the finance minister has set a goal to look at an inclusive growth. "This will mean that there will be some deficit, but what caused surprise in the markets was the number. As far as lack of policy announcements go, the Budget is not the place for it. These announcements can happen later as well," he said.
    Agreed Kalpana Morparia, head of JP Morgan India. "The Budget has put India on a growth path. The fiscal deficit numbers were expected to get back to growth without any fiscal slippages is delusional. Given all the pulls and pressures the finance minister was subjected to, the Budget was a finely balanced act," she added. Corporate leaders agreed that the expectations from the new government were high as we have a stable government after a long time. "It was a decent Budget given the financial situation of the country. It's clear that the finance minister has a game plan, which he will unveil in the due course. Although the expectations from the Budget were pretty high as the government won with a majority," said NR Narayana Murthy, chairman & chief mentor of Infosys Technologies.
    RC Bhargava, chairman of Maruti Suzuki, said it would be wishful thinking to consider that the Budget will take the growth rate back to 9%. "To clock that kind of growth, even the world markets need to revive as exports still suffer. Although, the rural demand will be at the backdrop of the overall growth of India, adding to this will be the continued focus on infrastructure and other investments," he added. Chairman of Bajaj Auto, Rahul Bajaj, rated the Budget at 7 of 10 taking into account the finance minister's constraint of 6.8% fiscal deficit. "But, we expect in another three years, the deficit will come down to the 3% levels. The reaction from the markets was basically because it expected too much," Mr Bajaj said.
    ET NOW CEOs laud govt's effort to boost rural economy
THE government's focus to boost the rural economy in the Budget is the right way for inclusive growth, which will go a long way to bring prosperity at the grassroots level, top CEOs of India Inc said. Addressing a panel discussion held at ET NOW's studios soon after the Budget, Manvinder Singh Banga, president (Foods, HPC) of consumer products giant Unilever, said the government's focus on stimulating rural demand and all the measures to put money in the hands of consumers will go along way. "We are doing well as a nation and from here on, we can only look upwards. Consumption-led focus is a great way to get going. We must remember not many geographies are seeing the kind of growth which we are seeing," said Mr Banga.
    Finance minister Pranab Mukherjee increased the allocation for Bharat Nirman by 45% for this year and extended the time for farmers under the debt waiver and debt relief scheme till this year-end. The target for agriculture credit flow has been set at Rs 325,000 crore.
    The allocations for rural housing and road projects were also increased substantially. The debate over managing fiscal deficit and growth was a hot topic during the discussion. "When it comes to choice between growth and managing fiscal deficit, one must go for growth as fiscal deficit will take care of itself," said Akhil Gupta, CEO of Bharti Airtel.
    According to Ravi Mohan, chairman of rating firm Crisil, said fiscal deficit is within bounds of our expectations and was not a major negative shock. The fiscal deficit has increased from 2.5% of the GDP in 2007-08 to 6.2% of the GDP in 2008-09 due to fiscal accommodation. The major disappointment for the CEOs was the absence of a road map for disinvestment and radical reforms, especially in insurance sector.
    "Certain key sectors could have been opened to FDI and radical reform measures could have been put in place," felt Claire Innes, MD (Asia Pacific), IHS Global Insight. Sanjay Nayar of KKR feels the FM should have been more elaborate on the source for long-term debt and equity capital. "From the private equity's point of view, the consumption-led story is superb, but from the supply side and how the government will meet the needs of huge borrowing programme is a puzzle," Mr Nayar said.
    Sameer Hashmi

AS FAR AS LACK OF POLICY ANNOUNCEMENTS GO, THE BUDGET IS NOT THE PLACE FOR IT
KV Kamath
CHAIRMAN, ICICI BANK

IT'S CLEAR THAT THE FM HAS A GAME PLAN, WHICH HE WILL UNVEIL IN THE DUE COURSE
Narayana Murthy
CHAIRMAN, INFOSYS

NOT MANY GEOGRAPHIES ARE SEEING THE KIND OF GROWTH WHICH WE ARE SEEING
MS Banga, PRESIDENT (FOODS,HPC), UNILEVER