The Indian Economy Overview team gathered reactions from several key personalities on the Budget proposals presented by the Finance Minister, Mr. P.Chidambaram, in the Lok Sabha, the lower house of Indian Parliament, earlier this evening.
Mr.Montek Singh Ahluwalia
Secretary of State for Finance, Government of India.
The new Infrastructure Development Finance Company to be set up with capital provisions of Rupees 500 Crore from the Center and Rupees 500 Crore from the Reserve Bank of India would use the capital martket very intelligently to raise resources for infrastucture projects.
Mr. Chidambaram's budget recognizes the need for providing for basic minimum needs of the poor with an additional 2466 crore towards various schemes.
Referring to the absence of the much awaited opening of the insurance sector, he said that deregulation of the insurance sector might have to wait until the next budget, but as announced in the Common Minimum Program, measures have been put in place to strengthen the Life Insurance Corporation and General Insurance Corporation.
As regards agriculture, he said irrigation projects have been given a major emphasis and that it was incorrect to suggest that outlay for rural and agriculture sectors have not been raised.
Mr. Chidambaram's budget, while continuing the reform policy of the previous government, has provided the missing link by putting major emphasis on infrastructure.
Mr.Atal Behari Vajpayee
Leader of the Opposition Parties
Mr. Vajpayee termed the budget presented by Mr.Chidambaram as "directionless", a budget which will result in price rise, unemployment and dependence of the country on foreign nations.
He says the United Front does not have any consistent policy and it seems the budget was a step in completing the unfinished agenda of the Congress over the last 5 years.
He said the Finance Minister had failed to substantially increase defence expenditure. "Keeping in view the security environment in the region and the hostility of the forces from across the border, defence expnditure should have been increassed considerably."
"This directionless exercise is a result of dependence for support on the Congress, of the loosely knit coalition" he added.
Mr.Pawar described the United Front government budget proposals as "good" and said Finance Minister Mr.Chidambaram had done his best to improve the investment climate.
Mr.Pawar also stated that agriculture and industry sectors had been given a boost in the Budget.
Janata Dal Leader
Mr.Sharad Pawar said the budget proposal was "for the poor".
He said key sectors like infrastructure, rural development and education have been given a lot of thrust in the budget.
CPI(M) leader in the Lok Sabha
MrChatterjee described as "good" and observed that the Finance Minister had kept in mind the Common Minimum Program.
Prime Minister of India
The Prime Minister said the budget was aimed at improving the condition of the poorest of the poor.
"This is the first budget of the United Front government. Therefore we have ensured that the budget fully reflects the objectives of the Common Minimum Program of the United Front.
Former Prime Minister of India
Mr.Rao welcomed the budget proposal. He said "It is a good budget".
Economist, Center for Policy Research
Reflecting the point of view of many economists and leftist observers, Mr.Majumdar said the Finance Minister Mr.P.Chidambaram has done an excellent job keeping all the left parties happy. However he was unconvinced that the budget would pave the way for major foreign investment.
On a counterpoint, the traders in the Bombay Stock Exchange seem to have been very disappointed in the budget, as indicated by the market sentiments taking a sharp downward dive. Share prices at the Bombay Stock Exchange, India's biggest stock exchange, TUMBLED
The Bombay stock exchange has recovered and closed marginally higher than opening figures.