The Hindu Business Line : `Budget allocation to agriculture not in line with the sector's problems'

BUDGET TALK: Mr R. Srinivasan, Member, State Planning Commission, addressing `Budget Talk 2007' in Madurai. Others seen are (left to right): Mr S. Renganathan, advocate; Mr S. Sridharan, chartered accountant; Mr V. Neethi Mohan, Vice-President, TNCCI; and Mr P. Selvaganesh, Additional Director, Investigation, Department of Income-Tax, Madurai. — K. Ganesan

Madurai March 13

The panel members on the Union Budget 2007-08, under the Business Line Budget Talk series held for the second year in succession in the city, treated the public of Madurai to a deeply educative and knowledgeable discussion.

The panel consisted of Mr R. Srinivasan, Member, State Planning Commission, Chennai; Mr S. Sridharan, Chartered Accountant, Madurai; Mr V. Neethi Mohan, Vice-President of Tamil Nadu Chamber of Commerce and Industry; Mr P. Selvaganesh, Additional Director of Investigations, Department of Income-Tax, Madurai; Mr S. Renganathan, Advocate, Central Excise Consultant and Ms S.K. Lokeshwarri, Chief Research Analyst, Business Line, Chennai.

Mr Krishnan Thiagarajan, Chief, Research Bureau, Business Line, Chennai, moderated the session.

Significant concern over the Budget exercise in the overall context of the Indian economy was raised by the members.

Mr R. Srinivasan, outlining the contextual significance of the Budget, felt that the allocation to agriculture and the allied sectors has not been in proportion to the problems faced by the sector.

Beset with jobless growth in the last one and half decades, he said the insecurity of the labour force was palpable and wondered `why the Finance Minister alone was expected to respond to problems and not other ministers?'

Mr P. Selvaganesh, complimenting a positive Budget, said the Finance Minister has ensured the momentum of the economy and has not built breaks into the Budget. The mindset of industry must change with reference to minimum alternative tax. Speaking on inflation, he said the Budget cannot influence the supply side.

Mr S. Renganathan welcomed the changes relating to the Settlement Commission.

Reduction in interest rates will help to come to settlement. The tax on job worker was not the right step, he added.

Mr Neethi Mohan, broadly concurring with the proposals in the Budget, felt the service tax on rentals of commercial buildings needs to be opposed. On power sector, he emphasised that cutting down the loss in transmission and distribution is equally necessary as adding to the capacity. A clear sense of direction for development has been set by the Budget, he underscored.

Ms Lokeshwarri felt that the future of the stock market depended on domestic liquidity with the growing urban middle class playing a lead role. While plenty of volatility is expected in the current year, a well-advised approach will be needed in the long term, she said.

Sustaining Investments

Mr Sridharan felt that the problems in agricultural sector have not been adequately addressed. Describing India a long-term story and the Budget as a routine exercise, he said confidence in the economy would sustain as investments are continuing.

In the Q&A session, the audience expressed their concerns over the trend in inflation, competitiveness of rupee, retail sector, level of taxation, the scope for widening the tax net and more.

An Agricultural Prices Stabilisation Fund was sought to take care of the volatility in agricultural prices.

The title sponsor of the event was Ramco, Rajapalayam with associate sponsor, Hi Tech Arai Ltd, Madurai .The hospitality partner was Fortune Pandiyan Hotel, Madurai.

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