Budget 2006-07: India

Overall the budget looks sensible. Agri-credit expanded to Rs. 1,75,000 crores, covering 50 lakh more farmers. Farmers can get short-term credit at 7%. My only apprehension about this scheme or any other government scheme is that of execution. Strategising is one thing and proper implementation and delivery is another. According to estimates roughly 10% of aid reaches the intended target. Also there seems to be no step to insure the farmers against crop loss at national level. The scheme of depositing Rs. 3000 to girl child after she enrolls for class VIII is welcome. Allocation for educators and health care increased by 31% and 22% respectively. Emphasis should have been laid on increasing the quality of medical services and the ethics exercised by doctors while treating the patients. Also education should be made more bread based and affordable for poor. Some sort of financial aid should also be helped ( in return for some errands) to poor kids. FII limits for the stock market raised to $2 billion , markets will see increased investment. 82 power projects to generate 69,500 MW of power in private and public sector. Welcome step if next summer there is no load shedding.Personal income tax and corporate tax rates not touched. Securities transaction tax increased marginally from .02 to .025. This is to result in loss to short term equity investors but I think its good for the health of equity market. 1,000 girls school for SC's , ST's, OBC's and minorities. Effort should be to make them efficient, productive, competitive and employable at par with other candidates so that they don't require the the crutches of reservation. The list of items that got dearer and cheaper looks fair.

Tax holiday for power projects and industrial parks would give a much awaited fillip to the infrastructure requirements of India. Peak customs duty reduced to 12.5% from 15% will result in cheaper imported components and goods and boost consumption and improve the fundamentals of the economy and enabling India to achieve higher growth. Minimum alternate tax increased to 10% from 7.5% negative , but credit can be taken for 7 years instead of 5 years ,positive step. Countervailing duty of 4% in imports to make domestic producers more competitive.