But his successor at the CII president Rajesh V Shah stated that the budget would help in restoring the investors confidence and lend the economy a status of a strategic value-adding partner in the region. Ficci president K K Modi summed up industry's feelings when he said "We were expecting the worst. But the finance minister has presented a development-oriented budget rather than the nuclear budget which was expected".

Assocham hailed the budget as "pragmatic and bold, under the present difficult circumstances" but pointed out that the budget did not give any indication to revive the capital market. The increase in petrol prices mayhave a cascading effect at a time when there is a slowdown in the industry, the chamber said. Also, the additional levy of excise duty to the order of nearly Rs 5,000 crore may adversely affect the certain segments of the industry, it added.

Stock markets reacted sharply -- Sensex fell by 152 points -- as the budget proposals failed to meet market expectations. "The petrol price hike will trigger inflationary pressure on the economy," said an industrialist.

Shah said that the union finance minister has initiated a number of bold decisions to bail out the economy from the current slowdown. He said the increased outlay in infrastructure, plan outlay on energy, transportation, communication, housing and roads would vastly improve the situation and get back the economy on a seven per cent plus GDP. "Thanks to hike in duties, input costs will go up. Prices will ultimately depend on what the markets can bear. Additional duties on petrol will cause inflation while fiscal deficit will not be of much help incontrolling the inflation. The main thurst of the buidget is on infrastructure especially of the power, road and telecom sector," he said.

The president and managing director, Premier Automobiles Ltd, Arvind Doshi, said the imposition of Re 1 per litre on petrol including the excise hikes for road development is a negative step taken by the finance minister as there was no guarantee whether the revenue collected through this cess would be allocated for road development. "The general experience has been that such revenue was diverted elsewhere," he said.

Welcoming the budget, R K Pitamber, president of Bombay Chambers of Commerce and Industry (BCCI) said that opening up of the insurance sector as well as PSU disinvestment upto a cap of 26 per cent have been addressed favourably.

The government's new import duty cushion came in for varying reactions from the corporate sector immediately after the budget. While some senior industry leaders lauded the move, others criticised it as beinganti-competitiveness. V N Dhoot, chairman, Videocon group summed up the emotions of the supporters of the move when he said: "This is a Swadeshi budget for Swadeshi industries. Hike in import tariffs is a welcome step as it will help domestic industry."

S D Kulkarni, MD and CEO of L&T supported the imposition of 8 per cent special additional import duty.

The president and director steel firm, Mukand Ltd, Sukumar Shah said: "Expenditure has not been controlled and there was no deep cut on subsidies. There is every likelihood to lead inflation and eight per cent across the board hike is retrograde. There appears to be ad hoc in too many areas and there was no thrust on exports and savings".