Budget 2012 to contain fiscal deficit and tame inflation: S P Hinduja, chairman, Hinduja Group

NEW DELHI: Hinduja Group Chairman S P Hinduja today described the Budget as investment-friendly and balanced, stating Finance Minister Pranab Mukherjee intends to tame inflation by adhering to fiscal discipline.

"Against the backdrop of looming political uncertainty, the eurozone crisis and slowdown in world-wide economic growth, the Finance Minister has endeavoured to present a balanced and reassuring Budget 2012-13," Hinduja said in a statement here.

He said the Finance Minister has proposed to contain subsidies to two per cent of the Gross Domestic Product (GDP) from 2.5 per cent in 2011-12 and further to 1.7 per cent in three years.

"The administration of subsidies is to be reformed. The intent of adhering to fiscal discipline to tame inflation and strike a healthy trade-off between growth and equity is clear," Hinduja said.

This would help the government achieve fiscal consolidation in the medium term and would lead to a "more liberal monetary policy and rising investment".

The Hinduja group head said the budget has provided several positives like reduction in the securities transaction tax (STT), Rajiv Gandhi Equity Savings scheme to boost retail investor participation, divestment of government stake in the public sector units and the permission for qualified foreign institutions in debt.

He said higher outlays for infrastructure and duty exemptions for thermal power companies, coal and LNG would enhance opportunities in the sector.