The Hindu Business Line : `Aims to address farm inefficiency'

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Director Kotak Commodity Serv The Budget is somewhat on the disappointing side. The Finance Minister, Mr P. Chidambaram, could have covered his Budget canvas with many bold strokes, but chose to be rather conservative in more ways than one, preferring to maintain status quo or using very delicate strokes. However, he may be forgiven for the lack of boldness, if we look at the Budget using the prism of the recent electoral losses for the ruling party and the inflation prevailing in the Indian economy at this point of time.

Pre-budget, most analysts had expected the Finance Minister to get down to the business of addressing inflation in the country.

The primary way in which this can be done in the Union Budget is by pulling the strings on various kinds of taxes levied. The good news is that the Finance Minister did reduce import duties all-around and excise duties in some cases. We are of the view that these steps would surely help rein-in inflation to some extent, particularly in the short run.

It also became evident very early on in the address that the Government was serious about dealing with structural inefficiencies in agriculture, which have led to the inflation. For e.g., the Minister has announced that yields of pulses would be increased significantly by increasing the availability of high-quality seeds for which he has mandated certain institutes.

Further, water availability being a key issue in agricultural productivity, the Minister announced allocations for increasing ground water availability through methods such as harvesting and also for training farmers in effective water management. These steps show the seriousness of the Government in this area.