Rural India is an expanding market waiting in the wings; it will expand markets for entire corporate India, writes R. Seshasayee, managing director, Ashok Leyland Limited.

The very attribute of a sound economic programme is its predictability. The Union Budget 05-06 is notable for its lack of surprises. If it failed to excite despite being sensible and rational, it was only underscoring what a budget ought to be; be prudent, predictable and address fiscal consolidation. When the economy is moving with momentum, why disturb it?

Happily with the reference it took from the Economic Survey and the recommendations of many expert committees already known and debated, the budget being on expected lines, reveals the government's intent. Its strong focus on the rural / farm/ social sectors convincingly says so. If the last budget had some broad brush strokes and some sensitive detailed flourishes, this time the finance minister reveals a much more comprehensive blue print for these sectors. He has thought through all aspects, from education, health to a micro credit delivery mechanism to vocational skill development.

This is welcome as an unexceptional boost to social justice and employment creation. This will slash the time gap of the trickle down development. What education and employment will do is to convert the vast majority of India residing in the rural sector, to participate in economic value creation and consumption. Rural India is a vastly expandable market currently waiting at the wings.

There is one caveat though, and that stems from India's federalism. There could be more than discomfort when the central government enters micro management with delivery of developmental products and services in sectors some of which are state subjects.

The budget scored almost full marks in terms of spelling out the economic destination. The concept of a good, consolidated goods and services tax for the entire country shows that VAT is only a first step. Mr Chidamabram has taken the expected next steps toward tariff parity with ASEAN. The personal income tax ratings reflect the spirit of Kelkar committee recommendations.

The urban renewal fund is the first response to the very visible disintegration of urban infrastructure. Most of these may not be big strides but the intention is clear, so is the destination. Among the different questions not attempted are labour reforms, (referred to in the Economic Survey) there are also some articulations of good intentions, which await action by committees to be constituted - the worry is India does not have a good record in government committees.

One pleasant surprise was the conformance to the FRBM (fiscal regulation and budget management) norms. Substantially larger outlay with no compensatory hikes in revenue streams shows that the finance minister is banking on continuing GDP growth. It must be noted that the growth in recent years have been consumption led. With productivity and efficiency gains plateauing and with no capacity over hang, the time was ripe to coax investments in fresh capacities, especially in the manufacturing sector. Therefore it was surprising that the finance minister choose to discourage capital formation by reducing depreciation benefits.

A couple of phrases the finance minister used in his speech reveal his mind, his anxieties, and possible answers. Referring to the multi tasked destinable Bharat Nirmaan project, he himself admitted to the need for a 'business plan'. Elsewhere he reminded us (and himself) that 'outlay is not outcome'; it reveals the concerns in delivery and implementation, which is pivotal to the success of the plans. It also shows the resolve to address the mammoth tasks with result orientation, more like how the corporate world would approach it.