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Friday, 1 March, 2002, 15:38 GMT
Harsh words for India's budget
Protestors in New Delhi
Protestors disapprove of Sinha's budget
India's newspapers have said the 2002/03 federal budget unveiled on Thursday will not be enough to revive the declining economy, but the country's stock market has bounced back.

"It is a budget that hurts everybody, unless of course you are a non-resident or a foreign company," said the Times of India.

It was a mixture of good and bad, and there could have been some signal or message to excite industrial groups to invest, to spur them into action

Rajiv Saxena
Lazard India
The Business Standard was a little less critical of Finance Minister Yashwant Sinha's proposals.

"There is a great deal on offer in the sector-specific initiatives, but to the key question of what the budget does for speeding up economic growth, the answer that suggests itself is: Not enough."

A more optimistic mood reigned on the stock market as dealers focused on the specific benefits for corporations.

Indian shares rose sharply , recouping most of the previous day's losses.

The benchmark Bombay Sensex index rebounded to close 3.3% higher after sliding 3.87% on Thursday as tax proposals in the budget dismayed investors.

Markets lukewarm

But after digesting the details, analysts still felt the budget offered too little for industry.

"It was a mixture of good and bad, and there could have been some signal or message to excite industrial groups to invest, to spur them into action," Rajiv Saxena, Managing Director of Lazard India told the BBC's World Business Report.

Bombay stock market
The Sensex index dropped as Sinha delivered his budget
"And there's nothing that's given demand any impetus."

Mr Sinha defended himself, saying the country's fiscal deficit had reached an "unsustainable" level, and that his latest budget tried to strike an appropriate balance.

Analysts' have also expressed concerns that the government's projections for tax revenue and economic growth are too high, and the forecast deficit too low.

The deficit - which the government has identified as the key factor hampering economic growth - is expected to widen to 5.7% of gross domestic product in the coming year.

Sinha criticised

Virtually all Indian newspapers stressed that most Indians will be paying more tax during the year beginning 1 April.

"All taxpayers, individuals and corporates, will be left with less to spend or save," said the Times of India.

Finance Minister Yashwant Sinha
Sinha says his budget addresses the deficit
"A harsh budget was perhaps necessary to kick-start the economy. But what Finance Minister Yashwant Sinha has delivered in his fifth budget is pain without the prospect of gain."

The Business Standard added the government had made a brave but ultimately futile attempt to rein in the budget deficit.

"It's a brave budget... Try and recall the last time a finance minister raised the prices of fertiliser, kerosene or cooking gas. And dropped the interest rates on small savings. And took away tax incentives on those savings. And taxed dividends, and imposed a tax surcharge."

Rajiv Saxena, Managing Director of Lazard India
"There could have been some message to excite industrial groups."
See also:

28 Feb 02 | South Asia
India unveils annual budget
26 Feb 02 | Business
India's deficit weighs on economy
26 Feb 02 | South Asia
India hikes rail fares
25 Feb 02 | South Asia
India's BJP mulls poll blow
25 Feb 02 | Business
India pledges economic reform
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