'This Budget is mildly positive'

The Indian industry on the whole was disappointed with Yashwant Sinha's 2002-03 Budget. Some criticised it outright others like R Seshasayee, the managing director of Ashok Leyland, called it a mixed bag.

In an interview with Shobha Warrier, Seshasayee said that even though it was a Budget of missed opportunities, there were still quite a few positive measures.

The mood of the industry, the middle class and the stock market is very grim after the finance minister presented the Budget. Is anyone happy with it?

I think this is an immediate reaction. If we give some more time to understand the impact of the Budget on a variety of issues, maybe somebody will be happy in due course.

Having said that, I also agree that the Budget instead of doing things in a breakthrough manner has taken an incremental approach.

There are no bold initiatives to remove the obstacles to make Indian companies globally competitive.

There is no significant announcement for the infrastructure sector or labour reforms.

Further no comprehensive policy measure has been announced regarding value added tax.

This Budget is mildly positive but not negative.

The general complaint is that the Budget has not done anything to create buoyancy. Do you agree?

Well there are lot of good things in the Budget.

Like the 20 per cent pep up in the public expenditure, the focus on agri sector, the effort to globalise the country in terms of capital accounts convertibility, reduction of duty in due course, and the reforms in the banking sector particularly in restructuring the assets and dealing with non per forming assets.

I would call it a low risk, low return effort.

The issue is, some of these good things don't answer the current problems. Therefore, while these will certainly make a positive impact in due course, the current situation of demand slackening has not been understood sufficiently.

Sinha said this Budget is for tomorrow. Do you feel so?

Yes, the Budget is certainly for tomorrow but we have to survive today.

What were your expectations from the finance minister?

My expectations were not very high this time because there were political compulsions, and last year's dramatic Budget was not fully implemented.

So, I knew there would be some hesitation in making further commitments when the earlier ones were not fulfilled.

Last year's industrial growth was a dismal 2.3 per cent. When do you expect the industry to come out of the slump?

Unless the sentiment improves, and there is adequate surplus of money in the farm sector for consumption, I don't expect the industry to recover in a big way.

As far as the commercial vehicle industry is concerned, do you see any positive signal in the Budget?

Nothing has happened to the commercial vehicle industry. The Budget did not have anything much besides the general reduction in the peak customs duty from 35 per cent to 30 per cent, which should have some impact in terms of raw materials.

However, the Golden Quadrilateral, some additional allocation to rural roads and matginal drop in diesel and petrol prices are some of the other good measures.

The Budget also makes it easier for the entry of vehicles from other markets. But I don't find that would be an immediate threat.

You must be happy about the Rs 55 billion that the finance minister has kept aside for developing rural infrastructure.

Yes, in an indirect way, the focus on the agri sector will help us.

However, I would have liked to see some innovative solution to deal with food grains, and solve the endemic problems that plague the agricultural sector.

Mere allocation of extra funds is not going to be sufficient to solve the problems.

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