India's budget was no big bang event, but it is still pro-growth

THE Indian budget, presented by Finance Minister Arun Jaitley on Feb 28, was one of the most anticipated in recent memory. Reactions have been mixed but what is apparent is that the minister's maiden full-year budget was meant to set the stage for reviving India's US$2 trillion economy over the next five years, before the next elections are due.

This partly explains why the Budget does not contain "big ticket" items such as major tax reliefs and reform-linked announcements. With nothing to excite them, the Indian stock markets were rather tepid in showing their appreciation for the finer nuances of the budget.

Mr Jaitley provided US$114 billion to build more roads and improve the country's creaky rail infrastructure. The government has set a multi-year target of building another 100,000 kilometres of all-weather roads, apart from repairing and widening existing ones. A major exercise in laying railway tracks and modernising signalling systems is also on the cards. The government projects US$39 billion worth of capital expenditure this year in a bid to give momentum to the economy which has been hit by a steep fall in private sector investment.