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Saturday, Mar 01, 2003

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Opinion - Budget


Ravi Uppal

THE Finance Minister has once again reiterated the intention of passing the Electricity Bill in this session of Parliament. This will go a long way in giving more structure and direction to the power sector and laying out a blueprint for the sector reform process which is already underway

The Budget is largely silent on specific power sector outlays and distribution reforms, for instance the APDRP funding.

There is a provision to extend the mega power project benefits to all generation projects that meet the mega power project criteria, in order to give a fillip to power generation. This in turn has an effect on follow through transmission and distribution.

On the infrastructure front, a significant project outlay (Rs 60,000 crore) has been announced, focussing mainly on roads, airports, ports, water, etc., with private sector participation. Housing and construction have been given a boost - this is good for derived demand and infrastructure development.

Core sector industries should benefit along with others like automobiles, textiles, white goods, IT, and telecom.

Reduction of peak rate in Customs duties from 30 per cent to 25 per cent and simplification of excise duties to a three-tier structure are positive moves from an industry perspective.

Although the dividend tax has been abolished the burden has been shifted to corporates through the distribution tax.

Procedural simplifications aimed at cutting down bureaucracy and red-tape should assist in speeding up transactions and helping the economic recovery gain momentum.

(As told to Business Line by the author, Vice-Chairman and Managing Director, ABB India.)

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