Budget 2001 - 2002, view and review

The time has come when the country will once again face the Union Budget, that is on 28th February, 2001. Statistical figures are indicating at the poor economic growth of the country, ranging from debt to investment, irrespective of any sector and state. Today all eyes are on the Finance Minister, Yashwant Sinha and his team of Officers, who are all busy giving final touches to the Budget, 2001-2002.

It has been witnessed over the years that the ruling parties and the opposition always sing together on the issue of increase in subsidy level, irrespective of growth of the particular sector or industry. Taking for example the food and the petroleum industry, despite increase in food as well as petroleum subsidies, the growth over the years is not appreciating.

When we think about the possible reasons behind the fall in economic growth, Fiscal Deficit, heads as the major problem. The fiscal deficit of the country, combining public as well as government undertakings, is somewhere around 12-15%. Growing rate of expenditure in the absence of adequate revenues, has decelerated the economic developments.

Commenting on fall in the economic growth, Kumar Bhukhanwala, Chief Finance Officer, Fisher Rosemount (I) Ltd said, "Considering our revenue deficit, I would like the Government to bring it down to zero, which is possible, if not in a year or two, but definitely over 4 to 5 years time span. Things have to be chalked keeping in mind current expenditures and current income. One of the first and foremost step, would be to remove surcharge. We are already in a very high tax regime. Above all the Budget should be friendly, with emphasis on investment, incentives for infrastructure developments. I believe there should be rebate in the capital expenditure also."

The Pre-Budget scenario indicated that attention of people, specially the Ministers waved towards the developments in the Rural Sector. Focus has shifted from major industries to small scale industries. Proper infrastructure development is one thing that everyone is emphasising on, as far as the new budget is concerned.

According to T Krishna, Vice President, Lowe Lintas, "The tragedy of India is that, even after 50 years of Independence, we don't have proper infrastructure, which we feel only when some kind of major calamity strikes the country. Result of our ignorance towards infrastructure development is that, today we are burdened with huge borrowings, not really knowing the way of repayments. As far as the consumer market is concerned, I expect the Government not to increase the rate of tax on fast moving consumer goods, because that will in a way increase the cost of utility and the market will shrink."

One sector which has managed to grow in the snail pace economy, is the software sector. Today, India is known worldwide more for its software expertise, than anything else. This industry is paying, around 5% service tax to the Government. "The software industry has grown over the years without any help from the Government. What we are asking is there should be minimum government intervention in this sector. As far as our developments and expenditure goes, we have been and will be transparent in our dealings. We expect the Government not to increase the service tax beyond 5%, done so, might effect the growth of the sector," averts, Hemant Adarkar, Chief Technical Officer, Ways India Limited.

All said and done, now its just a matter of 24 hours, to see which way the economy will move. One thing that is to be seen, considering all constraints and targets, whether Finance Minister Yashwant Sinha will be able to give a serious boost to the economy or not.

By: Sharmistha Chakraborthy

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