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February 27, 1999
'There is nothing to stimulate industrial demand or the capital markets'
Basically a good Budget, many plus points, but to take the negative points: nothing to stimulate industrial demand or the capital markets. Plus points: MODVAT credit restored from 95% to 100%, discontinuance of 5% special customs duty, rationalisation and reduction in customs and excise rates, making a start on downsizing government, (four secretaries is a good thing, no one else has done it before), setting targets and Foreign Investment Promotion Board approval within 30 days and national fund to encourage innovation.
Yashwant Sinha could have given some sign for Foreign Direct Investment. The telecom policy recognises that India lacks funds to create infrastructure to support a growing IT regime, and some encouragement to FDI in this area would have been welcome.
Like Sinha spoke about a 10 per cent exemption for T&D in power, he could have made a similar suggestion for telecom to help India become a software superpower.
The Budget has addressed the problem of falling exports. But I cannot see what he has done taking our exports to the 20 per cent growth rate that we were achieving. A lot more needs to be done.
The government task force is working on privatisation and the entire question on how it is to be done is under review. Hence, I did not expect the finance minister to say anything more on that. I believe when the policy comes out, there will be a serious attempt at privatisation.
Vijai Kapur, MD, Usha India Ltd, Telecom and Steel
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