Ramesh Bhojwani, a senior equity research analyst, is sceptical about the social sector and rural spending envisaged by Finance Minister Pranab Mukherjee in Budget 2009-10. He invokes what late Prime Minsiter Rajiv Gandhi had to say about rural poverty alleviation schemes.
"When the late Rajiv Gandhi was prime minsiter, he went on record to say that only 15 per cent of what is spent on alleviation of poverty and rural employment and social sector spending actually reaches the targeted people," he says.
Hence, he believes Pranab Mukherjee's efforts to stimulate demand by spending on such measures will not lead to the desired result of higher growth. He says that the Indian GDP will grow by a modest 7 per cent this fiscal year.
He rates Pranab Mukherjee's Budget 4 to 6 on a scale of 10.
Bhojwani's biggest disappointments include no word on foreign direct investment, an absolute silence on reforms which is the need of the hour in several sectors like banking, realty, infrastructure and power. "Even the issue of divestment in PSUs has been given a passing reference," he adds.
"Even a five per cent divestment in top 20 PSUs could fetch Rs 50,000 crore (Rs 500 billion) every year, year after year, to fill the fiscal deficit gap," he says.
However, he feels that the abolition of fringe benefit tax and commodities transaction tax is good but is too short and too less. He says this was not the kind of Budget he expected from the team of the calibre headed by Dr Manmohan Singh.
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