Roadmap to boost GDP growth to 8%
01 March, 2005 | Financial Express Bureau
ShareMr. Kumar Mangalam Birla
Financial Express Bureau
1 March 2005
The Budget will build the platform for taking Indian growth to around 7-8 per cent of GDP on a sustainable basis. It has been c;reated with a human face.
P. Chidambaram has pro-actively addressed issues such as health, education, sanitation and irrigation facing the rural population. He has also spoken on the urban renewal fund. This is the first Budget that has focussed on renewal of urban India. It is a positive step and will help mega cities.
The Budget has touched upon an active rural health programme. With the pro-active rural health infrastructure, I would like to see India up from the present 127th position to the top 25 nations in the next decade.
Overall the Budget is a fine balancing act. It has focussed on three main sectors — rural, health and education — which are key to any growing economy.
Emphasis has also been laid upon infrastructure. The decision to form a special purpose vehicle (SPV) for infrastructure projects is a positive step. The reforms in the textile sector have thrown open vast opportunities for Indian companies. On employment, the Budget promises generation of two crore jobs every four years.
The benefits of a reduction in corporate tax will be visible later. Though there has been a reduction in corporate tax from 36.5 to 33.5 per cent, a surcharge of 0.5 per cent on petrol has been levied to develop highways. The rate of depreciation has been changed and one is unsure how this would benefit the corporates.
Regarding personal income tax, I feel that there has been little change. What the Budget has done is rationalise personal income tax. But what matters now is the implementation. And we can't hold the finance minister or the Centre responsible for this. The states should focus on implementation.
The Budget is cast in a new mould in the sense that it very clearly says that development is not a zero sum game. It ensures that rural and urban India prosper side by side.
As told to the FE Bureau. Mr Birla is Chairman, The Aditya Birla group
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