INDIA'S finance minister won applause from the corporate sector yesterday after delivering a budget on Monday that cut tariffs, corporate taxes and interest rates, but the ballooning fiscal deficit was seen as cause for concern. Business leaders largely welcomed what they saw as a growth-oriented budget, but said the fiscal deficit of 60 billion rupees (about HK$13.5 billion) was way off target and could blow India's far-reaching economic reform programme off course. In his budget speech, Mr Manmohan Singh said the fiscal deficit would expand sharply to 7.3 per cent of GDP in the current year ending March, against an original target of 4.7 per cent. He forecast a deficit of six per cent in the coming year. ''The minister's measures of corporate tax, excise and customs, along with convertibility of the rupee on the current account, were more or less expected,'' said tax expert H P Ranina. ''But the disheartening factor is that, with the huge fiscal deficit generated, it becomes apparent that the ministry has lost its grip on the fiscal situation.'' Rahuj Bajai, chairman of Bajaj Auto Ltd, India's biggest motorcycle manufacturer, said if the deficit did not stay within limits next year it would fuel inflation and interest rate rises. ''It is most alarming that the budget demonstrates the government's inability to curb its appetite,'' said Venu Srinivasan, managing director of TVS Suzuki, another motorcycle manufacturer. ''We cannot afford a situation where the deficit keeps getting out of hand. The corporate sector will benefit, but what about the country?'' However, businessmen took heart from the cut in corporate taxes to 40 per cent from above 50 per cent, reduction in import tariffs, and the trimming of the minimum lending rate by one percentage point to 14 per cent. The liberalised access to foreign exchange on current business transactions was also welcomed by business. ''An excellent budget, as it contains several proposals to boost the economy and the process of reforms. In spite of the difficult fiscal position, the Finance Minister has offered reliefs of 30 billion rupees in direct taxation,'' said G B Desai, president of the Bombay Stock Exchange. Small-scale industries, where more than 40 per cent of industries are unregistered, will heave a sigh of relief because unregistered units will enjoy the same tax exemption limit as the registered firms. ''This is an excellent step,'' said Vijay Kalantri, president of the All India Manufacturers' Organisation (AIMO). ''Doing away with the surcharge on personal income tax, reducing interest rates and reducing corporate rates may be small measures to meet the needs of being competitive in the global scenario. But they are bold steps in economic reforms, especially in the direct and indirect tax structure,'' he adds. ''The Finance Minister has dared to look conventional wisdom in the eye, and has taken a bold step for tax reform, in spite of the fears of traditional experts,'' said S. Venkitaramanan, former Finance Secretary. ''I believe this is the best year for reform - with the level of reserves being as high as it is [US$13 billion], the momentum of change being strong, and the national polls not being too close [they are due only in mid-1996].'' However, some industrialists complained the budget did not provide incentives for private sector investment in infrastructure projects. ''Our expectations were that the budget will provide an impetus to infrastructure development, but there is no policy package for that,'' said one source.