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ShareThe day after, industry representatives were more generous and less critical in their assessment of finance minister Pranab Mukherjee's Budget proposals. In a lengthy interactive session in the capital on Tuesday, Mukherjee replied to questions posed by industry leaders on issues ranging from fiscal deficit to inclusive growth, oil deregulation to the introduction of goods and service tax (GST).
Excerpts:
On returning to the growth path
The basic approach in the Budget is to return to the growth path. Not in statistical terms, but real inclusive growth.
On reduction of fiscal deficit from the projected 6.8%
It would be my endeavour to reach the target of 5.5% by end of fiscal 2011 and 4% by 2012. For that, in the next 7-8 months, we have to do a lot of work.
On the agriculture thrust and growth
Rural and agriculture focus would yield higher growth compared with other sectors. There's competitive advantage on the global scale in agriculture and other rural areas. Merely construction of roads, cold storage and warehouses can't change the map of rural India. I'm talking of mass demand here.
On infrastructure funding touching 9% of GDP by 2014
That's the target. Substantial private sector funding will come into that. PPP is one of the vehicles being considered for it. As I said earlier, the government focus will be on cold storage, warehousing, food processing, among others, and the demand is expected to be huge.
On monitoring of important infrastructure projects by an expert group
I have already suggested to the Prime Minister that he should head the infrastructure committee. In principle, I agree that there should be regular monitoring. Around 29 years ago, when we had come back to power, infrastructure bottleneck was a big issue facing the country. At that point, the FM (R Venkataraman) used to invite representatives of business chambers for their inputs on infrastructure development. We may do the same again, with effective monitoring of projects.
On the hurdles in introducing GST regime
I know that there is a problem. (Some states have expressed reservation on rolling out GST by April 1, 2010, as envisaged by the Centre.) Recently, I had a meeting with state finance ministers on this issue. There are differences, but it will be possible. Even in the case of VAT (value added tax), some states did not join in the beginning. The same may happen vis-a-vis GST also. I will try to persuade all the states to come along.
On oil sector reforms
There has been a lot of ad-hocism. We are victims of the situation. The petroleum ministry will set up an expert committee soon to examine the issue of viable and sustainable pricing of oil and gas.
On the roadmap for disinvestments
I agree that the roadmap of disinvestments should be in the public domain. But I thought that the Budget document is not the appropriate place to give it. It should come after detailed deliberation with the stakeholders. I have given a broad indication about the disinvestments intention of the government in the Budget.
On the proposed government borrowing
The intention is not to crowd out the private sector in the market. It's important that the private sector does not suffer.
On interest rates
RBI is constantly monitoring the interest rates. In volatile times, RBI has responded adequately.
On the hotel industry not getting its due in the Budget
We had considered the issue of tax exemptions and other concessions for the hotel industry. But it seemed difficult to implement at this point. Let me revisit and see if any concession can be given. This is not a commitment though.
On health being a priority sector
Health deserves to be a priority sector. I have asked the health minister for specific inputs on this. Participation of the private sector in the area of health must be encouraged.
