Parasu Raman, Deputy Chairman, Confederation of Indian Industry (Southern Region), and Managing Director of MK Electric Ltd spoke to Shobha Warrior on the Union Budget that was presented by Finance Minister P Chidambaram in Parliament on Monday.
Did the Budget meet your expectations?
Overall, it met my expectations. It is growth oriented. The finance minister has done a tough balancing act between the National Common Minimum Programme and the 12th Finance Commission.
One sees a good demonstration of fiscal prudence. It has focus on agriculture, infrastructure, education, and these are fundamental to the economic development of a country.
It will definitely have a significant multiplier effect on housing, infrastructure, and finally on the overall economy too.
Implementation of value added tax is a fantastic reform initiative that has finally come after 4-5 years of uncertainty.
Do you see any negative aspects in the Budget?
I would like to describe these as, lack of positives rather than negatives.
I do not see why there should be a difference in corporate tax on domestic and foreign companies. It has widened from 5 per cent-11 per cent. When we talk about globalisation and reforms, why this widening of gap?
One would have expected significant reforms on the labour front but that has not been touched upon at all in this Budget.
Divestment also was not covered. One would have expected divestment to be a major instrument for raising fund for various projects, as was the case in the last 3-4 budgets but we did not see it at all.
Where is the finance minister going to get the money for the projects? From taxes?
Yes, there is tax revenue on one hand, and on the other hand, you are seeing a buoyant economy that is growing significantly well.
The growth that we see now should continue.
Which sector will benefit the most from the Budget?
The construction sector will benefit primarily from the Budget. The manufacturing sector too will benefit because of the reduction in Customs duty. Textiles, sugar I see almost all sectors of the industry moving up.
Do you expect any rollbacks?
I somehow suspect the 0.1% cash withdrawal tax to change. Administratively too, it is not an easy thing to maintain. I think there will be public pressure on the FM. Even in the Parliament itself, it was not welcome.
Will the finance minister keep his promises?
He has fulfilled all his promises last year, so I don't see any reason why he shouldn't this time.
Do you think this was the best possible Budget that he could present?
I think he has balanced everything very well.
How would you rate the Budget on a scale of 1-5?
Actually, I will have to study the Budget a little more. Still, I would definitely give a rating of 3.
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