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February 27, 1999
'This Budget attempts to put the brakes on the slide'
I think it is a positive Budget. For white goods there are certain specific reductions in excise duties which one should expect to be passed on to the consumer. Passed on in the form of lower prices.
I think the general sentiment of the Budget is aimed at reviving the feel good sentiment which has been missing for the last three years. Because of political uncertainty making itself felt in stock market upheavals, real estate prices, breakdown in law and order etc etc.
I think we can hope to have a stronger year from now if the Budget sentiments can be translated into positive intent by the ministries concerned, the bureaucrats and industry.
I think we expected excise duties to go up since the government was so strapped for money. The fact that they have taken on the issue in this forthright fashion, I think, is a very positive sentiment.
I think all these sentiments are good sentiments. It is very positive that they are being said rather than not being said. I think talking about good corporate governance is positive, improving spread of primary education is positive. I think talking of improving the flow of credit to the small scale industry is positive sentiment. Talking of downsizing of government and public sector undertakings is positive, but obviously the details of all these schemes will make it much clearer.
The fact that they recognise some of the realities of the situation and therefore the intent to address it is positive. On the other hand, when they talk about special subsidies and incentives to be granted for industries set up in the North-East, that is obviously vague. There are much larger issues to be addressed first over there -- law and order, infrastructure etc -- before you can induce people to set up new industries.
I think everybody came here, expecting that the Budget would be very negative. Because the economy is in poor shape and strapped for funds. But the announcement has actually been attempted to be a positive way of addressing some points while holding the status quo on some other points. And obviously having to hit some sectors because money has to be raised.
We had a similar type of situation when Manmohan Singh took charge in 1991 and announced a Budget package when the economy really had a gun to its head. The difference between then and now is that because of all the political happenings over the last three years we have allowed growth opportunities to slip by. This Budget recognises that and attempts to put the brakes on that slide.
Hopefully, if this government lasts we will see a growing boldness to address difficult questions on setting right the growth path of our economy.
I believe the government will also gain boldness when it sees that the positive steps it has announced just now is beginning to yield results.
I would like to say this that in white goods this year we will look forward to pick up this opportunity as an industry, to try and reverse the gloomy and negative trend in consumer sentiment over the last three years so as to have a terrifically strong and positive year.
Vijay Crishna is managing director, Godrej-GE Appliances.
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