Question mark on budget's populist schemes reaching the common man
Mumbai, Mar 2 (UNI) The rural focus and general direction of the budget are welcome, but whether the end result of the populist schemes mentioned in the Union budget will be met remains in question, according to Atherstone Institute of Research Ltd's Managing Director Gurunath Mudlapur.
For the industry too, it would be more beneficial if the process and tax rates were made more consistent, simple and pragmatic considering the fact that many Indian businesses were nurturing plans to become global players.
''It is here that the right and timely investments in building of a quality infrastructure should make a difference,'' Mr Mudlapur said in a release issued here today.
Observing that the budget ''is good for India'', Mr Mudlapur made particular reference to the reduction in the revenue and fiscal deficits, both of which now stand reduced to 2.6 per cent and 4.1 per cent of the GDP respectively.
He also lauded the government for its ''ability to match up to its revenue collection targets, which has been a largely successful exercise'' despite traditional avenues like the annual agenda of divestments being absent from the Finance Minister's speech.
Highlighting the rising savings rate in the economy (29.4 per cent) coupled with a low inflation rate (-5 per cent), Mr Mudlapur said that this presented a great opportunity for the Indian economy to grow at a rapid rate in the coming years.
''We guess the Finance Minister has taken this cue to ensure that India could dream big by factually mentioning a possible ten per cent GDP growth in 2006-07,'' he observed, adding that ''all these parameters imply an inherent and planned positive growth momentum for the economy.'' Describing as ''constructive and achievable'' the government's target of 2.1 per cent for revenue deficit and 3.9 per cent for fiscal deficit for FY 07, Mr Mudlapur pointed to the the government's initiatives to ensure that planned expenditure grew at a faster pace than the non-plan expenditure in FY 07.
Terming as a ''smart move'', the finance minister's action to gather revenues from a buoyant capital market through the securities transaction tax, Mr Mudlapur found noteworthy the government's efforts towards having an equitable indirect taxes regime and maintaining the tax rates on both personal and corporate incomes, through there was an increase in MAT for corporates.
He described the budget with particular reference to indirect taxes as a move to rationalise the import duties at a lower base as well as to normalise the inequities of the oil sector subsidies and excise duty structures.
However, it will be heartening if the government could look at the option of controlling and reducing its non-plan expenditure through fruitful methods, he opined.
Atherstone Institute of Research is an investment banking organisation active in the spheres of corporate advisory and business consulting services, value-added research, investment advisory and financial inter-mediation solutions.
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