This ’feel-good’ is because of many reasons. For one, the interim Budget was preceded by a series of policy reform measures and the so-called mini-Budget across sectors that benefitted a large chunk of the economy. Second, by definition of the interim Budget being a vote on account, the constitutional and legal constraints on the government had naturally pegged down expectations. Third, it was also known that the compulsions of an election year Budget would have necessarily ensured that the Finance minister would not have been able to go whole hog in giving a number of sops and concessions that he may have otherwise been tempted to give. That is why this Budget is measured in tone, but pleasing in content. Although the initial and immediate reactions from the stock market has not been very encouraging, in the longer term, it will possibly be seen to be popular without being overly populist.

However, the industry’s vote of confidence may be rooted in more deeper reasons. This includes the macro-economic performance indicators and overall robust performance of the economy. The management on the fiscal front, the larger containment of the inflationary pressures, the focus on infrastructure development in the Budget, the better than targeted disinvestment proceeds realisations (despite the fact that it has been stalled now) have all gone to give a good degree of confidence in the government’s economic record, its management of the economy and the Finance minister’s implementation of issues. Finally and this is very important: , the poor performance of the Opposition parties, the current political wave in favour of the National Democratic Alliance (NDA) and the personal high stock of Prime minister Atal Bihari Vajapyee have given a degree of confidence to the Indian industry and a sizeable section of the foreign investors that the NDA government has a high chance of coming back to power after the forthcoming elections. In fact, privately, that is also possibly what a large section of Indian industry is also hoping for. While betting on the good performance factor, a good chunk of Indian industry are also now said to be backing them too. All of this goes on to become a vote of confidence in the current government, its economic performance and also the management on the external affairs front which would have helped in better relations with foreign investors. Sections of Indian industry also believe that there could be a few more sops too in the next day or two like liberalisation of the civil aviation sector.

In all this, it is clear that the government the Finance minister have taken pains to give due credit to the Prime minister and the Finance minister in his speech indicated in a number occasions that a number of the initiatives in the Budget has been at the Prime minister’s prompting. The Finance minister also gave due credit to his predecessor Yaswant Sinha indicating continuity of reforms. That has been a great comfort factor to the industry.

All of this means that a good chunk of the Indian industry is betting on the long term in this government and that any shortcomings and disappointment to a certain section of the industry from this interim Budget would be offset by the possible long term benefits that a continuity in the NDA government would give them.

The industry believes that the current measures announced in the interim Budget is actually a consolidation of all the economic measures by the NDA government in recent times. Second, all of this is also signal an indication economic continuity and the industry is confident that all of this would backed by further measures in the medium term. Finally, the big focus on infrastructure development and the fillip given to sectors like civil aviation, tourism and shipping has gone a long way in boosting long term confidence. There is also the belief that some of this will boost consumer spending in the medium term even though there is directly nothing much for example for the fast moving consumer goods (FMCG) and consumer durables sectors. Finally, the fact that there is a big focus on the agriculture sector and the rural credit and banking sectors also gives a degree of confidence to the Indian industry.

In all this, are there no worries that industry has for its future and what the government can do for them? There are some undercurrents that would be there but which may not surface at least in the immediate in a high decibel manner. One is the fact that the government will actually be able to increase its spending on the crucial infrastructure and development projects. In the past, one has seen that many of these have been mired in bureaucractic and other tangles. The other major worry is some of the reforms that the government still needs to implement, like for example in the labour reforms front.

In the end, the Finance minister and the government has also managed perceptions well. It is also another indicator that the government will do better in some of the states in which it is trying to tie up some fresh alliances, like in Tamil Nadu. The government has indicated to the industry that it is willing to back it up as much as it can and that it is willing to do its part. In some sense, the ball is now in the industry’s court. While implementation and continuity of some of these will be important, the industry too has an important role to play in the coming months.