Union Budget 2013: Just what the doctor ordered

Overall, the Budget has been well-crafted. It focuses on current priorities and investments for the future. It also sends a message within the government that we need to communicate better, including identification of areas that require better communication. The Budget provides continuity in policies. The government now needs to follow up with action.
There is a strong focus on inclusive and sustainable development, concerted efforts to kickstart investment in infrastructure and manufacturing, achieve fiscal consolidation targets by maintaining fiscal deficit at 5.2% for the current year and budgeting for 4.8% for the next year.
Some key positives are the focus on infrastructure building, including allowing institutions to raise tax-free bonds and facilitating flow of funds into the sector. There is incentive for investment through a 15% deduction as investment allowance for amounts above Rs 100 crore. The MSME (micro, small and medium enterprises) migration arrangement that permits small companies to retain benefits for three years after they grow beyond their category will encourage entrepreneurs to keep the focus on growth.
There is a strong focus on the energy sector, with the statement on coal import, blending and pooled pricing for the power sector, enhancing coal production through the PPP model, restarting stalled energy exploration projects and refining the policy on exploration.
The additional deduction of Rs 1 lakh on repayment of home loans for first-time buyers is a positive step. The fiscal deficit of 5.2% indicates that discipline has been maintained; a deficit of 4.8% for the next year provides comfort to all stakeholders. This creates an environment for moderate interest rates and provides space to focus on revival of growth. This should boost confidence, encourage FDI, and support the balance of payments and the currency.
KV Kamath is Chairman of Infosys & ICICI Bank
Union Budget 2013 > Budget news 2013 > Economic Survey