The Vote-on-Account presented by Mr. P. Chidambaram, Hon’ble Finance Minister of India on 17th February 2014, signals an end to the second term of the UPA regime in India. While, the fiscal deficit is estimated to be 4.6% and Revenue deficit 3.3% of GDP which is better than expected, but it is probably at the cost of growth friendly measures.The high interest rates continue to deter demand driven growth opportunities. The fundamental economic reforms needed to enhance manufacturing capacities, technological improvements and productivity are still missing. A large number of infrastructure and other projects have been cleared by the Government only recently. The impact on the economy in general and sentiment in particular is yet to be seen.
There is some silver lining on the Horizon. The RBI is taking pragmatic steps to keep up with its primary focus to tame inflation, while also keeping the drivers of growth intact. This is having a positive impact on the monetary impulses in the economy.These are discussed in the presentation made by the S.R.D. Knowledge Team.
The Finance Minister has given some relief in indirect taxes to automobile sector, in mobile handsets, certain chemicals, road construction machinery etc. The political aspects of the Budget including ten-year report card on various issues would continue to be debated till the elections are over.