Union Budget focus on agriculture & infra is positive

The FRBM target of 4.6% of GDP for FY’12, 4.1% in FY ’13 & 3.5% in FY ’14 and statements like “double digit growth visible

"The task of achieving a 4.6% fiscal deficit & a 9% GDP growth would be difficult, but the Union Budget 2011-12 is focused on achieving fiscal consolidation without hurting growth by way of higher taxes. This tighter fiscal & monetary policy is would be conducive in controlling inflation and hence interest rates. The FRBM target of 4.6% of GDP for FY’12, 4.1% in FY ’13 & 3.5% in FY ’14 and statements like “double digit growth visible”, “resources are not constraints” & “need for more transparent governance” give some confidence that the government is serious about achieving these target. Focus on Agriculture & Infrastructure is a positive for the growth of our economy. Finance Minister has also highlighted the need of improving share of manufacturing from 16% to 25% of GDP and has stated that government would come out with manufacturing policy for the same. Direct transfer of subsidies like kerosene, LPG & fertilizer, if implemented, would help in controlling subsidies. SEBI registered mutual funds are now permitted to accept subscription from foreign investors and this would be a positive for India in the conducive market environment. We expect favorable news flow to continue in terms of policy announcements for FDI, Urea Policy, Policy for direct transfer of subsidies, Manufacturing policy, Food subsidy bill, National Food Security Bill, Public Debt Management Agency of India Bill and on implementation of GST & DTC, policy for further developing PPP projects & policies to tackle black money. Hence I would term this budget as reformist and all eyes would shift from budget announcements to framing & implementation of announced bills & policies as well as achievement of stated budget numbers."