I rate Union Budget FY 12 as a balanced budget and a budget that is non-disruptive. FM is continuing with the policies of the Government since it came to power keeping the focus on growth and inclusiveness. The Government continues its endeavor to maintain robust economic growth and steady fiscal consolidation by focusing on economic inclusion, liberalizing FDI policy, boosting investment in infrastructure, agriculture and the social sector and simplification of procedures. The budget has to be seen in the context of the measures already announced and I am sure there will be several other measures that Government will announce progressively, to ensure that the economy exceeds the 9% GDP level at the earliest.

The Government's target GDP growth rate of 9% and commitment to bring down fiscal deficit to 4.6% of GDP for FY 2011-12 and 3.5% of GDP by FY 2014 are statements that hold a lot of promise. There has been a positive change in the quantum of fiscal deficit for FY 2010-11 which was at 5.1% of GDP against the previous budget estimate of 5.5%. The FM affirmed his resolve to introduce DTC from 1st April 2012. However as regards GST, the rollout including constitutional amendment is still in progress.

The increase in MAT rate, when it is felt that it is already high, would not have a beneficial effect on the industry, although this would be marginally offset by the reduction in surcharge. The imposition of MAT on SEZ developers will have an adverse effect on SEZs.

On personal taxes front, while the exemption limit has been increased to Rs. 180,000, there was need for greater increase keeping in mind the stubborn inflation over the past year and other factors. The liberalization of existing scheme of interest subvention of 1% on housing loan and enhancing housing loan limit to Rs. 25 lakh for dwelling units under priority sector lending are positives.

The focus on infrastructure sector is in keeping with India's insatiable need for enhanced infrastructure. India suffers from severe infrastructure deficit and any steps that are taken towards improving infrastructure are welcome. An increase of 23.3% over last year for infrastructure allocation, policy for development of PPP projects, increasing FII limits for investments in corporate bonds by US$ 20 billion to US$ 40 billion, and proposed issue of Tax free bonds of Rs. 30,000 crore will help in the process of capital formation and infrastructure development necessary to sustain the economic growth of the country. Industries like steel, that have high capital outlays and also have high contribution towards creating infrastructure, should have been categorized as infrastructure industry too.

While steps have been taken for the food sector in the form of steps announced for Food Security Bill, Mega Food Parks, Agriculture Produce Marketing Act, storage capacity and cold chains, allocations to various schemes, etc., the budget could have offered more on the short term measures to contain food inflation.

The continuation of the disinvestment policy with a target of Rs. 40,000 crores in FY 12 is a welcome measure.

I also believe that there was an opportunity to develop Mumbai as an international financial center in view of the decline of traditional financial centres in the West and elsewhere, but the measures expected to be announced in this regard fall short of what could have been done to capitalize on this opportunity. The various legislations proposed in 2011-12 and discussions to liberalize FDI policy are a positive. Foreign investment in mutual funds would enable greater inflows and greater participation in the Indian capital markets but at the same time, this would also require careful monitoring. Funds provided for capitalization of Public Sector Banks, Regional Rural Banks and NABARD are also strong positive measures to ensure financial robustness of these banks and encourage financial inclusion, though the banks are likely to require greater capitalization to cope with increasing growth.

The green orientation of the budget in the form of national mission for hybrid and electric vehicles, allocations for Green India Mission, Environmental Remediation Programmes show the commitment of Government to addressing environmental challenges facing the country.

The greater allocations for social sector (by 17%) and education (by 24%) are also welcome positives but delivery and execution in these areas are crucial, especially keeping in mind the recent governance failures.

The increase in export duty on iron ore exports (lumps and fines) to a uniform rate of 20% with the intention of encouraging value addition within the country is a step in the right direction but the exemption of duty on pellets also reduces the scope for greater value addition within the country. The value addition at the pelletization stage is much less compared to finished steel stage and the aim should be to encourage steel production within the country, which would lead to more jobs, output and value addition within the country. It has been a persistent demand of the steel industry to include steel plants as infrastructure industry and it is hoped that steel plants would be included in infrastructure as capital investment in fertilizer production has been included in this budget. FM may still consider this request of the steel industry.