The budget is more focused on a 7 to 10 year perspective, with short term view being very fluid and uncertain in nature. The Finance Minister has not announced any policy measures that would take care of inflation, domestic demand & most importantly the general sentiment of the consumers. The steps that have been announced are very significant & would stimulate domestic demand in the long run. The very short term liquidity should remain comfortable whereas medium term liquidity may be on a tighter side. The possibility of any further interest rate reduction also stands ruled out, as is evident from the rise in the yields of the treasury. By not disclosing the amount of disinvestment & by indicating that they would not disinvest in the Public Sector Banks, it is quite evident that the disinvestment would be very selective, would be done as & when required & may not happen for the top blue chip companies held in the Public sector. Doing away with FBT is a good step in rationalizing the tax regime.
This budget is good for domestic investment, domestic savings & domestic consumptions but all in the long run. I think the Finance Minister is blending the classical Keynesian economic model of economic recovery with that of the capital market debt recovery. The increase in the agriculture credit flow in real terms is not substantial & with the monsoons this year expected to be below normal much more should have been allocated to this sector. The interest subvention could also have been increased. The changes in the direct taxes are not substantial & will not increase the disposable income by any large amount. Thus the view of many experts that there would be a spurt in economic demand does not seem to be correct. Infrastructural projects like rural roads, NREGS, NHAI, JNNURM are all welcome steps for the long term growth of the economy. Looking at the budget in totality, I do not think there is any kind of fiscal stimulus that has been provided to keep the economy moving.
Profile of Mr Siddharth Shankar, Economist/Director Kassa
Mr Siddharth Shankar is an Economist and Financial Expert. In the last 12 years, Mr. Siddharth Shankar has established himself as a master in tackling financial hurdles for his clients. He does Independent Consulting for top notch companies also. His expertise is to structuring Financial Products for companies to cover their financial risks that were generated due to their international exposure to Money and commodity markets. Many national and international corporate houses still seek his opinion. He has been involved with the marketing systems of Google, Yahoo and other search engines to achieve the maximum effectiveness of their campaigns. His expertise lies in Product Conceptualization, Web-based marketing of Products. He also heads the Financial Services Company. Mr Siddharth Shankar holds the position of Director in the Financial Services Company "KASSA".
