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June 1, 1998


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'An inflationary Budget which will not encourage consumer spending'

Send this story to a friend Kiran Majumdar Shaw

A disappointing Budget, which really does not promise to "kick-start" the economy or, for that matter, infuse investor confidence as is evidenced by the drop in the stock market.

It is a very inflationary Budget which will not encourage consumer spending. Merely reducing capital gains cannnot infuse investor confidence, and I would have liked to have seen some good tax incentives on R&D spending and patent-related spending as well.

India has a great potential in biotechnology -- and biopesticides is not biotechnology!!

Increasing import duties across the board will certainly not protect Indian industry from the highly devalued exports from the depressed Asian countries and China. Anti-dumping duties would have been more relevant.

As far as cutting red tape goes, I have no details of the plan, but the red tape cutting execise is already in an operational mode, and it will certainly help to do away with more red tape -- but what we need are strong economic measures as well, to boost the economy.

Increasing import duties is, in my opinion, detrimental to kick-starting the economy as it will only increase production costs.

I don't see how they have made things any different to boost exports with, but yes, exports is definitely the way forward. We need simplified procedures and better infrastructure to deal with exports and this has not been addressed.

I think the industrialists are quite unhappy, especially the processed food sector where excise duties have gone up. Even the automobile sector, which expected some relief, will be very disappointed. As for the economists, I think they need to do some real re-thinking on this insipid Budget. We need a push forward at missile speed, not at bullockcart speed!

I expected a lot more from Yashwant Sinha and from the BJP. We just haven't taken advantage of the crisis in Asia, and instead opted to almost join the bandwagon!

Come on, Mr Sinha, you could have been much more pragmatic rather than just address the agriculture sector and corporate and individual taxes, NRIs and the Film industry!

In a nutshell, like I mentioned earlier, the BJP government's first Budget was disappointing and insipid!

Kiran Majumdar Shaw, chairman and managing director, Biocon, spoke on The Rediff Budget Chat.

Budget '98

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