Budget a letdown for natural resources sector

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Published: March 1, 2015 1:33:05 AM

The Union Budget 2015-16 has focused on stimulating growth, promoting investments and facilitating...

The Union Budget 2015-16 has focused on stimulating growth, promoting investments and facilitating ease of doing business.

My consistent view has been that stability and predictability of government policies are the two pillars indispensable to attract capital investments to any country. I believe the Budget 2015-16  presented by Union finance minister Arun Jaitley on Saturday reflects my view and will help  maintain the growth momentum that has been created by the central government led by Narendra Modi since it came to power last year.

The key takeaways from the Budget are its focus on infrastructure, public investments and social security measures. Increased outlays on infrastructure development would be a key growth enabler for other inter-dependent sectors. The higher public investments will be a catalyst for higher private investments too.

The economic survey brought out that except for the mining sector, all other major industrial sectors have experienced a slowdown in credit growth in 2014-15 as compared to 2013-14.

To keep up the momentum, the extractive industry had expectations for impetus that would have led to a stronger Indian resources sector. The successful conclusion of coal block auctions contributed significantly to states, thereby re-establishing the importance of the natural resources sector to the Indian economy.  Therefore, we expected measures that would lead to a still stronger Indian resources sector, so important for the Make in India programme aimed at transforming India into a global manufacturing hub.

Steps such as re-establishment of tax parity between imported and domestic crude oil would have provided a level- playing field to players involved in both these products.  Export duty relief for  iron ore exports from Goa was another such expectation.

Such measures would have enhanced the contribution of the natural resources sector to the Make-in-India mission.

By Tom Albanese, Group CEO, Vedanta Resources

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