Financial Daily from THE HINDU group of publications
Tuesday, Nov 09, 2004
Financial Daily from THE HINDU group of publications Tuesday, Nov 09, 2004 |
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Opinion
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Buyback Booming economy
It is, indeed, celebration time for the Finance Minister, Mr P. Chidambaram. The economy is booming because of the upbeat festive mood and the good rains. There has also been good collection of direct and indirect taxes. Also, more than 290 listed companies have shown over 100 per cent increase in net profits. There is, in fact, so much feel good sentiment in the economy that people are accepting even the rise in the price of crude without too much protest. However, the only worrying point seems to be the growing inflation which can be checked easily by reforming the manufacturing sector. The Finance Minister needs to give a positive dose of reform to the manufacturing sector by raising the SSI exemption limit to Rs 2 crore and abolishing the additional excise duty. This will have a two-pronged effect of decreasing inflation and increasing GDP by a manufacturing revival. The other demand of the manufacturing sector is a simplified and easy value-added tax (VAT) by April 2005. If the design of the VAT is good there may not be any need for a compensation package for the States.
It is also necessary to continue some incomplete NDA programmes with renewed zeal. Sushil Mehra Bangalore
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