‘We only have political, and no economic, budgets in India'

How have Budgets been impacting industry and people in the last 20 years since the reforms were introduced in 1991? “Corporate Tax and personal income-tax rates have gone up significantly. The proposal to increase one per cent tax on 130 items would, in fact, result in an overall increase of 6-7 per cent,” Mr Nitin K Parekh, Chairman of Trade, Commerce Committee of Fapcci, said.

Delivering a lecture on ‘How taxes impact the common man and corporates' at the Business Line Budget Talk at Malla Reddy College of Engineering and Technology here on Monday, he said levying taxes had evolved into an art by successive governments. “All through, we only have political budgets and no economic budgets in India,” he said.

He, however, observed that fiscal deficit had come down to 4 per cent from 8 per cent and public debt reduced to 44 per cent from 55 per cent during the period. Debt servicing too came down to 18 per cent from 21 per cent. The reduction in the latter parameter was due to the overall reduction in interest rates and not because of the efficiency of India's economy, he said.

Mr S. Ramakrishna, Chief Operating Officer of Tata Teleservices, said one should be quick and prompt in inventing a new idea or a service in order to give more value to customers. “Customers should feel that they get a good deal on the purchase they made,” he said.

Speaking on ‘Budget and new technologies, services sector and entrepreneurship', he said “entrepreneurs should constantly identify ways to understand, develop and deliver additional value to consumers. “How well are we taking care of this task,” is the key for success of any enterprise.

Relating the success story of telecom revolution in India, he said this opened up opportunities such as financial inclusion initiatives. “Mobile phones as money transfer machines could soon replace ATMs and other money transfer mechanisms,” he said.

He highlighted the importance of picking up the right opportunity at the right time. “To take such key decisions, one should work hard and plan.

Mr G. Yoganand, Chairman and Managing Director of Manjeera group, with interests in real-estate and hospitality, said Budgets generally gave a direction to Government's developmental programmes.

Opposing the view that liberalisation had not helped the country, he said liberalisation could give the country what successive Budgets failed to achieve. Facing a resource crunch, Government evolved public-private model to develop infrastructure.

Stating that construction companies had emerged the second largest employer after agriculture, he said development of real-estate hinged on urbanisation. He, however, observed that the Government was not encouraging this sector. They were killing it with taxes.

Mr Ravi S. Rao, Managing Director of Value Momentum Software Services, said slapping of 18.5 per cent tax on SEZ developers and units was a dampener. “Stopping the STPI benefits would hurt the SMEs. SEZs are favour only large firms. It is a big challenge for small firms to survive and carry on. The minimum area one could get in an SEZ is 30,000 sft which an SME could not afford. It doesn't make any sense for any SME to move to SEZ,” he pointed out.