B Santhanam, chairman of the Tamil Nadu chapter of the Confederation of Indian Industries and managing director, Saint-Gobain Glass India Ltd spoke about the Union Budget to Contributing Editor Shobha Warrier in Chennai.

Did the budget meet up with your expectations?

I can say that in some areas, yes. In one important area, especially in the central sales tax reduction roadmap; the absence of clear communication about the CST being brought down to 2% in April 1 is a bit of disappointment.

Instead of reducing duty from 15-12.5%, the minister could have gone to 10%. But it is a step in the right direction.

One of the issues which is positive is the allocation for clusters. It has gone up tremendously from 26 clusters to 100 clusters. I think that can prove to be a big boon for small and medium enterprises. Tamil Nadu especially will benefit.

Talking about 100 ITIs to be corporatised is a move forward but the lack of any clear initiative in skill development and the mere allocation of Rs 10 crore for that is worrying because all of us are talking about skilled deficit as the single biggest area.

Will you call it a lost opportunity now that the economy is doing so well?

I will call it a skipped opportunity. We still have time to correct these things. I think when the going is positive, some more bolder actions could have been taken. I think he was very cautious but one has to see the impact of the huge increase in the allocation in rural India, employment scene, noon meal scheme, etc. Many of these schemes are very good because they try and improve the human resources potential.

But some very focussed programs on education, skill development, etc are missing.

And no news on the CST is troubling. I hope we still have a chance because he mentioned that the empowered committee is supposed to take a decision on that. If the CST is not reduced, it will be a disappointment for the manufacturing industry.

Which sector will benefit the most from this budget?

I think the agricultural sector should benefit because there are a lot of funds going towards agriculture and rural areas.

I think clearly the small car sector is going to benefit the most. The Rs.1-1.5 lakh car which Telco has been taking about will be a reality.

Are you happy with the initiatives on infrastructure?

I don't have any comment on that. But I am looking forward to his categorical statement that by June 2006, the Golden Quadrilateral will be completed because I travel 46 kilometres of that to my factory! So, I hope it is really true!

Will manufacturing benefit from this budget?

Reduction in customs duty will benefit the manufacturing sector. The 4% countervailing in lieu of that will have some positive protection to some of the industries which are suffering from import competition. 

What about the tax rates?

The tax rates are quite comfortable. Ok, there is a possibility to reduce it further.

There is a bit of disappointment about the superannuation fund because he is talking about a Rs 1 lakh limit. One has to study how many people will be impacted. Today, companies are paying about 15% superannuation on the basic.

How many marks out of ten will you give to this budget?

I will give between 6 and 7.