Reacting to Finance Minister P Chidambaram's Budget proposals on Monday, Jagdish Khattar, managing director, Maruti Udyog [Get Quote] Limited, said:

"This is a good Budget. The idea of a 50 paise cess on petrol to fund highway development is good because roads are vital to economic growth. Then, the cut in income tax and other taxes will increase disposable income in the hands of individual, and that will push up demand, which in turn will help economic growth.

"There is certainly no direct benefit to the automobile sector, but there is an indirect benefit by way of better roads and more disposable income.

"Yes, I would have liked excise duty on automobiles to be cut from 24 per cent to 16 per cent, but that has not happened. This means next February, my sales will drop! (Car sales traditionally come down in February with buyers preferring to wait for the Budget in the hope that if excise duties are lowered, cars will become cheaper.) In fact, car prices might go up since from April 1 this year, we are implementing Euro III emission norms.

"The key is delivering what has been promised and I am glad to note that both the prime minister and the finance minister realise that this is the most important task.

"Regarding expanding into the rural market, that really is not the government's job but our job: we automobile makers need to tap the vast and huge demand in the rural areas. And with better roads and connectivity, and more income as the agriculture sector develops, such demand will rise.