The Finance Minister has, with his Budget for 2010-11, put India back on the growth trajectory. Finely balancing growth measures with fiscal consolidation, creating an improved environment for investment and spending while keeping a check on curtailing inflation, the budget proposals have caused positive ripples through the industry.

Commitment to shrink the fiscal deficit to 4% levels over the next 3-5 years, targeted double digit GDP growth, drawing a roadmap for capping debt and disinvestment focus will go towards upgrading India’s sovereign rating – an indication of which was immediately seen through the positive reaction on the Indian bourses.

Proposals made in the Union Budget 2010 reflect the FM’s commitment to immediately revert to the 9% growth path and cross the ‘double digit growth’ barrier through various fiscal consolidation measures and growth which is inclusive, ie by bringing about reforms for poverty alleviation, focus on enhancement of education and healthcare, checking inflation and boosting the farm and infrastructure sectors.

The Budget has proposed many reforms pointing in the positive direction, key being to the financial institutions and the banking sector. Issuance of new banking licenses to NBFCs and private players, recapitalization of PSU banks and rural banks will help broadening and strengthening banking reach to the rural and semi-urban cities. Reaffirmation of the intent to simplify and introduce a comprehensive FDI regulation and setting up of an apex-level Financial Stability and Development Council.