The Union Government's attempt to reduce expenditure will not augur well for the economy. Though the figure might go up when compared to the earlier Budgets, the rate of growth in expenditure is going down, Prof. Sivaramakrishna Rao, a senior economist and former Head of Economics Department at Kakatiya University, said.

Giving insights into Budget 2011-12 at ITM Business School here on Saturday, he said the Government should have allocated more funds for National Rural Employment Guarantee Scheme as it intended to increase wages on the basis of wholesale price index. “Linking it with the index would require significantly higher resources,” he pointed out.

Stating that the Government had been withdrawing itself from vital sectors, he said the focus had been more on corporate sector, giving the poorer sections relatively lesser importance. “Most Budgets tried to pamper the rich. Of late, there has been a turnaround with the government talking about financial inclusion programmes,” he said.

Mr P. Bala Subramanyam, Research Head of PCS Securities Ltd, said Budgets used to play havoc on the stock markets. There used to be secrecy shrouding. “But now, information is readily available as the Finance Minister reads out his Budget copy,” he said, talking on ‘Impact of Budget on Markets and Financial Services'.

Mr Subramanyam, a market analyst, gave several suggestions to the management graduate students on the art and science of markets and investments. “One needs to be a disciplined investor, with an eye on fundamentals for long-term returns. Short-term investments are driven by emotions which might or might not result in returns. One should be a long term investor to be successful in markets,” he pointed out.

According to him, programmes like NREGA were not helpful to the economy as they promoted ‘lethargy' and not any productive initiatives.

“One should start very early and move away from the traditional way of investing only in banks. Maximum money could be made in knowledge industries,” he said.

Mr Nitin K. Parekh, Chairman of Trade, Commerce Committee of Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI), said there was a plethora of policies but no accountability that ensured implementation. “More than the fiscal deficit, it is governance deficit that is posing a bigger challenge to the country. This is adversely impacting the life of the common man,” he observed.

The Budget was not at all path-breaking, he said. “Levying of one per cent duty on 130 items will put burden on people as it includes even lanterns. This will have a cascading effect and would ultimately result in a tax burden of 6-7 per cent on these products.

“Budgets should be a national agenda. But most of the times, they are prepared based on political agendas.”

Mr Naresh Dubbudu, former consultant with McKinsey and Managing Director of Abhyas (a learning solutions company), said India and China used to dominate the world economy for about 1,300 years.

“It was since 1,600 AD only that they started losing sheen and their share slipped to low single digits. But they have started showing up again, of late,” he said.

He said that introduction of simpler tax mechanisms would facilitate better tax compliance, thereby increasing revenue receipts for the Government. The biggest challenge was tackling inflation without impairing growth.

Dr T. Dayakara Rao, Director of ITM Business School, and Mr P. Ranga Reddy, Regional General Manager of The Hindu , also spoke.

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