The Hindu Business Line : Budget lacks imagination: Analysts

There are possibilities of the expenditure spinning out of control, especially with regard to the food and fertiliser subsidies, and this could lead to further hardening of interest rates, especially with the monsoons getting delayed.

Our Bureau

Hyderabad, July 7

Although the Union Budget presented by the Finance Minister, Mr Pranab Mukherjee, on Monday set the Indian economy on the right track in the current global scenario, it lacked imagination and some bold initiatives. This was the general view expressed by speakers at the post-Budget analysis organised by the Andhra Pradesh chapter of the Confederation of Indian Industries here on Tuesday.

Setting the tone for the analysis, Mr M.R. Vikram, Convenor of the State unit of CII, said the Budget lacked imagination. He, however, went on to add that “this year we could not have been imaginative. We have to wait and see and let the clouds of global recession pass.” He said the Finance Ministry had limited options while preparing the Budget this year.

According to him, the trends of a flat growth in both tax and non-tax revenue reflected the threat of deepening of the fiscal deficit. And there were possibilities of the expenditure spinning out of control, especially with regard to the food and fertiliser subsidies, he pointed out, adding that this could lead to further hardening of interest rates, especially with the monsoons getting delayed.

Mr Vikram was of the view that the Finance Ministry could have taken some concrete initiatives with regard to disinvestment and identification of newer PSUs that could be divested, if not privatised.

Bouquets

Dwelling on direct taxes, Mr Jayesh Sanghvi, Partner (Tax & Regulatory Services) of Ernst & Young, hailed the initiative to chart out a new IT code, aimed at further simplifying tax laws. He however pointed out that there was a need to broaden the tax base. He was also in favour of introduction of the Document Identification Number scheme for every notice, order or correspondent from the IT department.

Mr B. Shankar, Senior Advisor, Ernst & Young, said that with regard to indirect taxes, the Budget was clear in its goal that the country was moving towards the GST regime, which signalled a good augury. “Apparently, a lot of ground work is under way to introduce the dual GST system with effect from April 1 2010, as stated in the Budget presentation,” he said.

He, however, noted that the process involved a slew of challenges, especially in regard to the possibility that some States may not be ready to implement the system. “These States will however hasten its implementation once they see that it was leading to revenue augmentation in States that implement the scheme,” he said with optimism.

Fapcci reaction

In a separate statement, Mr K. Harishandra Prasad, President, Federation of Andhra Pradesh Chambers of Commerce & Industry (Fapcci), said the Budget focussed mainly on three sectors; infrastructure, energy security, and agriculture. It is balanced Budget overall. The budget was on the expected lines without any big surprises, he said.

Mr Shekhar Agarwal, Senior Vice-President of Fapcci, said the Budget was not on an expected level for the common man as it did not have proposals that would make India an agriculture leader in the world.

More Stories on : Budget | Andhra Pradesh

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page