I also feel that the large fund allocation for the north eastern states will help the eastern region, particularly West Bengal, as Calcutta is the only gateway to this region. However, the economy will not be free from inflation and I feel that it will be somewhere in the range of six to eight per cent by the end of the year. Cost of money will also be high.

Now if we consider one issue after another, I find that against nine major positive aspects of the budget, there are about four negative ones. I welcome the Union government's decision to increase the infrastructure outlay by 35 per cent. This will not only help the industry but also attract foreign direct investments in the long run.

This budget has also made certain announcements in a clear departure from the past and one of these is opening up ofthe provident fund corpus for investment in the private sector infrastructure projects. Moreover, by mentioning dual rating of these private projects by credit rating agencies, the government has tried to maintain the safety of this investment. In this regard, I must also appreciate the move to open up the insurance sector for the Indian private sector companies. This will give long-term funds for long-term investments in infrastructure projects, thereby boosting the mega projects.

Another major announcement is the disinvestment of public sector units up to 26 per cent and total sellout if required. We in the CII have been urging the government to get rid of these sick organisations and the move is a right one taken by the finance minister. I also appreciate the reintroduction of the backward area subsidy for industries, widening of the tax base with an inclusion of a number of items under service sector and, as mentioned earlier, focus on the north eastern states.

Among the negative aspects, I stronglycondemn the finance minister's move to restrict the modified value added tax (modvat) up to five per cent. This will deter growth as it will lead to multiplicity of taxes. This restriction will have a cascading effect on the Indian economy. Interest payments have also gone up by Rs 9,200 crore and along with a high fiscal deficit, this will push up inflation. However, the inflationary pressures can be tackled with growth in industry.

Another result of higher interest payments and fiscal deficit will be higher interest rates which will make money costlier.

Moreover, I feel the budget has nothing worthwhile for the stock market in the short-term perspective. The stock market operators wanted buy back of shares but it was not granted. But I welcome the increase in the ceilings of NRI investment in the Indian stocks. Overall, I feel that though there are no short-term incentives for the stock market which has been down for more than 24 months, the market will stabilise in the long run as industrial growthpicks up.

I feel that industrial growth will be somewhere around six to seven per cent in the first five to six months this year. It will rise to nine to 10 per cent in the last quarter. In the agricultural sector, though a number of measures have been announced including a few for irrigation projects, still we depend largely on the monsoons, so it is hard to make any predictions now.

(As told to Kohinoor Mandal)