With economy clearly rebounding showing a 16.8% record industrial growth as per IIP estimates and fiscal deficit reined in under 7% and GDP growth projected at 8.5%, demonstrating that India has weathered the storm of the world wide recession and financial crisis , Pranab da has presented a very cleverly drafted budget showing his experience in administration.

Its clearly a growth oriented budget with great relief for individual tax payers, not harassed corporate tax payers but disappointed them by raising MAT to 18% from 15% when industry was expecting it to be reduced to 10%. He has put more money into the hands of commercial banks to lend so that credit flow is steady. This is welcome.

Plumping in about rs 16,500 crores into the monetary system is not a joke but he has certainly assessed the benefits vis-à-vis feared inflationary trends.

Credit flow will be steady and ensure that industries interested in borrowing and manufacturing Will not be short of funds at any time.

The stock markets have reacted sharply with the indices showing un upward trend generally, unlike last year when they declined sharply, demonstrating that its a growth oriented budget . Industry has generally welcomed the budget as being broad based and growth oriented while expressing disappointment on enhancing the level of MAT to 18% from 15% when it was expecting it to be reduced to 10%. FICII, ASSOCHAM, CII have all made statements to this effect.

Finance Minister has provided great relief to individual tax payers beyond expections by restructuring the slabs :

- the exemption limit for personal rates of taxation have been increased to 1.6 lakhs
- tax at 10% for incomes between 1.60 lakhs to rs 5 lakhs
- tax at 20 % for incomes between rs 5 lakhs to rs 8 lakhs
- tax at 30% for incomes above rs 8 lakhs.

This will result in revenue loss of rs 26,000 crore but is made up by revenue gain of rs 46,500 crores through partial roll back of fiscal stimulus, hike in excise duties particularly of petroleum products as international prices of crude have softened, and part rationalisation of customs duties. net revenue gain is rs 20,500 crore which government expects to come back partly in savings instruments and rest by way of increased consumer spending which will fuel growth leading to greater production and further leading to increased tax revenue to government.

Also, the government hopes to get rs 25,000 crore by divesting stake in PSU's.This will bring in substantial revenue and the finance minister based all his calculations on these revenue figures to project a decelerated growth of fiscal deficit.

Service tax untouched at 10% but this category has been broad based to bring more people under the taxation net to increase tax revenue.

Clear cut statements on implementing GST by April 01, 2011 and Direct Taxes Code by the same date.

Clear commitment to rein in fiscal deficit at 5.5% in the current fiscal and targets to keep it at 4.8% of GDP in 2011-12, and at 4% of GDP in 2012/13. A clear road map provided for the first time. Fiscal Deficit expected to be 7.8% of GDP in 2008-09 and 6.9% of GDP in 2009-10 against the estimated at over 7%.

Government hopes GDP will grow at 8.5% given the present indications that India has come out of the world wide recessionary trends and while the world watches with caution how the global meltdown recedes. Overall a great growth oriented budget with slight inflationary trends, but growth is always accompanied by inflationary pressures. So the budget does not disappoint but makes justifiable assumptions of growth, greater consumer spending to spur industry growth to in turn yield greater tax revenues, generate slightinflationary pressures through hikes on duties on fuels and other products, but generally a managebale inflation and not a runway inflation.