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June 23

'Not at all a swadeshi Budget'
How inflationary is the Budget? How growth-oriented is it? BJP national executive member Jagdish Shettigar and Communist Party of India-Marxist politburo member Sitaram Yechuri battle it out on the Crossfire debate.

June 21

The Budget? Fudge it
Some miracle this, the apparition of swadeshi has all but disappeared from the Budget, and yet the Swadeshi Jagran Manch has lost its voice of protest. Ashok Mitra offers a trenchant critique of the Budget.

Sanctions may not lead to substantial outflow of dollars
The economists were of the opinion that a five per cent growth can be achieved in the current year. This rate of growth has become a ''habit'' with the economy even though it is low for the current year.

June 14

Sinha has done nothing to keep his promises
The failed Indian economic development has conclusively proved that there's more to economic development than throwing fistfuls of money at problems and hoping that they will go away. The nation's obsolete and corrupt bureaucracy, which must translate policies into implementable programmes, needs urgent reform and restructuring.

'Sanctions will affect America more'
'... because if it is not Boeing, it's Airbus for us, if it is not American banks, it is EC banks. Russia is waiting to supply nuclear reactors. The French have offered nuclear submarines. All these countries are ultimately traders. Sanctions require principled business and not the principle of business.' S Gurumurthy on the Budget, swadeshi, sanctions, and, of course, Hindutva.

June 13

Special import duty slashed, urea price hike withdrawn
Under pressure from disparate political parties and farmers, Finance Minister Yashwant Sinha announced in the Lok Sabha concessions worth Rs 23 billion.

If Govt is going to amend its Budget, then where is its sanctity?'
Industrialists and economists analyse the impact of the import duty slash and the urea price rollback.

Roll back protectionist tariffs to avoid disaster: Chidambaram
The former finance minister said the latest erosion in rupee value and the special duty in the Budget would provide the Indian manufacturers almost 40-45 per cent price protection cover.

June 12

Budget is anti-NRI
The scrapping of the 'resident but not ordinarily resident' status, giving NRIs a tax holiday on earnings from abroad, is a retrograde step. So is the increase in the import duty on gold, argues eminent tax expert A N Shanbag.

Sanctions will not affect any project: Sinha
On the criticism that the Budget is silent on the sanctions, the finance minister said at best the US sanctions could have ''general impact''.

Maran praises Sinha's IT proposals
The former industry minister wanted the new one-page income tax return filing forms to be printed in all state languages.

June 11

Instead of a bang we had a whimper!
'What is the guarantee that, with Sinha holding the baton, the huge gaps between intention and implementation will not reoccur? Have any new hassle-free guidelines been announced to spur project implementation? No. This is the worry of private investors in infrastructure projects,' says Mahesh Nair.

SJM against reducing Govt stake in IA
Swadesh Jagran Manch all-India organiser S Gurumurthy also cautioned Finance Minister Yashwant Sinha on the dangers facing the economy.

June 10

Another roll of the die
'There are no ifs and buts in the Budget. Sinha does not mention, except in passing, the nuclear tests and the sanctions. He does not given an idea of what industrial growth is going to be like and whether inflation will be a problem. The finance minister is so self-absorbed that he either does not see the big picture or does not think it important,' says Jay Dubashi.

Automobile makers decry excise hike
The increase in excise duty from 25 per cent to 30 per cent on multiutility vehicles was unjustified as these vehicles primarily service the needs of the rural areas and inter-city tour taxi operators. Such a levy would only further depress demand, claim the automobile association.

June 9

Import duty will hit foreign investment, joint ventures
The swadeshi measure in levying import duty of eight per cent has made the country one of the most protected economies and the least foreign investor-friendly among the growing economies of Asia. The special additional customs duty would hit the foreign direct investor badly as most of the foreign direct investments have huge import components in their investment. It will also hurt joint ventures that are dependent on imports.

Common man will be hurt by the Budget's inflationary aspect
With excise duty rising to eight per cent, the prices of several items of common consumption in middle and upper classes, such as branded tea, cheese, butter, ghee (clarified butter), meat, spectacle lenses and frames, cigarettes and pan masala will rise. The cost of professional services such as real estate agents and consultants, architects and interior decorators will go up. And after the rail transport fare hike, now the duty on petrol will make road transport dearer.

Sanctions effect will be felt after a year, says Sinha
The finance minister rebuffed criticism that he failed to account for the sanctions and said his Budget was the first of its kind in the reforms era to go out of its way to recognise rural India and agriculture as central to the Indian economy.

Insurance workers hold rallies against planned reforms
About 200,000 insurance employees staged demonstrations to oppose the government's decision to open the insurance sector and resolved to stall the move through a powerful agitation. An LIC employees' leader said that by opening the sector, Indian companies will enter only in collaboration with foreign insurance firms.

June 7

Capital markets have missed positive facets of Budget
The Sensex has been crashing because the markets have been attaching undue importance to the negative aspects of the Budget. It would be a matter of time before the correction takes place, argues the Centre for Monitoring Indian Economy.

'Swadeshi bark and videshi bite'
Congress joint secretary Jairam Ramesh said that the finance minister's duty proposal would push up the prices of all packaged farm produces like spices, milk products, snacks, sweets and savoury items that are produced and marketed by small units.


Budget is a mix of the bold and the beautiful
No matter what critics say of Yashwant Sinha's budget, one thing has to be granted to the finance minister -- he has shown courage to introduce a number of pending schemes that his predecessors left on the back burner because of political pressures and the lack of will, writes Rajiv Shukla.

June 6

'It is the best possible Budget'
'It makes no tall claims but it is realistic, reasonable and takes all key issues into consideration.' Nani Palkhivala evaluates the Budget in an interview with Pritish Nandy.

Budget does little to aid industrial recovery
'The single measure which can be considered as a sop to industry, albeit a retrograde one, is the eight per cent increase in customs duties on import of most non-capital-goods industries,' writes the Centre for Monitoring Indian Economy.

Goa heaves a sigh of relief at Budget bonanza
The state, acutely desperate for funds, will now get Rs 45 million instead of the earlier anticipated Rs 30 million. However, the money will not go towards development work but to pay for the hiked salaries of 42,000 state staff.

Centre seeks to add 7.5 million to tax net
The Centre is aiming to increase the number of income tax assesses through the new measures on direct taxes announced in the Budget. The number of income tax asseeses in the last financial year had gone up to 15 million from 12.5 million.

June 5

Budget lacks fiscal discipline
The gross fiscal deficit is budgeted to reach 5.6 per cent of the gross domestic product in 1998-99. Given that most Budget proposals are optimistic and the current one does not show any signs of being different, the likelihood of the deficit turning out to be much higher is distinct, warns the Centre for Monitoring Indian Economy.

S&P expresses concern at fiscal deficit
Standard and Poor said it was satisfied at the thrust of the Union Budget on infrastructure but felt sceptical about the fast implementation of projects cleared by the Union government to counter economic sanctions.

Insurance unions opposed to a role for private sector
Six trade union have decided to agitate against the government's decision. They claimed that the new move for providing better insurance cover and mobilising resources for infrastructural development sounded "hollow and meaningless."

June 4

Govt keen to encourage NRI investment, says Sinha
The finance minister stated that the BJP government was keen to encourage non-resident Indians in the development of the country and to give dual citizenship to them. However, there were many legal complications, and as a first step, the provision of the Persons of Indian Origin cards has been made.

Budget might pave way for foreign insurance companies
The delays in opening the insurance sector have no rational justification. It is a poor comment upon our policy process that the labour unions of existing insurance companies have been able to delay things for so long. The announcement in this Budget is obviously a good idea; it is better to have private insurance companies competing in India instead of having public sector monopolies, says Ajay Shah.

'Budget is growth-oriented'
'It shows a very balanced approach, and is very pragmatic compared to last year's dream Budget,' says Dr S P Gupta, chairman, Society for Economic and Social Transition.

Budget aiming at 6.5% growth, says Ahluwalia The finance secretary said the eight per cent counterveiling import duty was not in contravention of the World Trade Organisation agreement and will affect only one-third of the imports.

Kerala hails forward trading in oils
Equally well-received is the 100 per cent increase in the duty-free baggage allowance - there has been a long-standing demand from the NRIs in the Gulf. So is the raising of the limit for secondary market investment by non-resident Indians.

Sinha's remarks during urea debate causes opposition walkout
Finance Minister Yashwant Sinha's remark that the opposition's protests against the increase in the price of urea was only an attempt to derive political advantage led to the walkout.

June 3

Government rolls back hike in excise duty on petrol, halves urea hike
Apparently stung by the criticism that the 17 pc hike in petrol prices announced by Finance Minister Yashwant Sinha in his Union budget, was anti-people, the government on Tuesday rolled back the hike, even as it retained the additional tax of Re 1 per litre. It also announced that the price of urea would be increased only by 50 paise and one rupee as announced yesterday.

'The opening of the insurance sector will send a powerful signal which will attract all kinds of investments'
'It is a growth-driven Budget, the impact of which will be felt not in the short term, but in the medium to long term,' argues Coopers & Lybrand chief J Rajagopal. 'The primary reason for this is that the main engine for growth is the infrastructure sector which, as you know, has a long gestation period.'

'Budget is not very strong on swadeshi'
'What is disappointing is that nothing has been done for the automobile sector. The same can be said about the capital goods industry.' Vinod L Doshi, chairman, the Premier Automobiles Limited, analyses the Budget.

'The good work done by the earlier two finance ministers seems to have been continued'
'We are absolutely sure that the process of liberalisation will be taken a step ahead in the right direction, benefitting the country in general,' A N Shanbag talks about the changes in income tax.

'No special policy package to revive capital market'
'The Budget is pro-farmer and pro-rural -- the allocation for agriculture, irrigation, water supply, and housing received a big boost,'' says Dr U Shankar, director, Madras School of Economics.

'The Budget is pedestrian and lacklustre'
'It cannot help revive the economy nor can it impart any buoyancy to the stock markets,' said former Union minister N K P Salve. 'I must concede that it is easier to sell socialism at the hustings than making a free market economy acceptable in a democracy.'

'In one sentence, it is an absurd Budget'
'It does not say a thing about which direction he wants the economy to move. There is no reference to actual or postulated rates of saving or capital formation, or to any projections with growth in agriculture and industry.' says former West Bengal finance minister Ashok Mitra.

'The policy on PSU disinvestment is the most striking feature of the Budget'
Larsen and Toubro director Y K Deosthale feels that since the government has given Indian industry time to face the competition, it should utilise this opportunity to substantially increase its presence in the global scene at the earliest.

Many concessions to film industry
The customs duty on the jumbo rolls of cinematographic film has been reduced to 10 per cent from the present 25 per cent and is bound to give relief to producers purchasing raw stock for their films.

June 2

Budget seeks to boost NRI, FDI inflows
Presenting the BJP government's first Budget, Finance Minister Yashwant Sinha increased the outlay for the infrastructure sector substantially. The agriculture sector plan outlay has been increased by 58 per cent, atomic energy plan allocation by 68 and the department of space by 62 per cent.

The FM inquisition
Three former finance ministers -- Professor Madhu Dandavate, Dr Manmohan Singh and P Chidambaram -- hauled Yashwant Sinha over the coals during a television interview. While Dr Singh felt it 'is a half-Budget', Chidambaram said it is 'a timid effort with no big ideas'...

Govt to divest stake in Indian Airlines, Indian Oil
The government will disinvest specified portions of equity from Indian Oil Corporation, Gas Authority of India Ltd, Videsh Sanchar Nigam Ltd, and Concor. Indian Airlines will be restructured to undertake a phased disinvestment over three years, bringing the government's equity holding down to 49 per cent.

Allocation for education up 50 per cent
The outlay has been increased to Rs 70.47 billion for the current year from Rs 47.16 billion in the previous Budget.

14 per cent hike in defence allocation
The Defence Budget for 1998-99 was pegged at Rs 412 billion, 14 per cent more than the revised estimates of Rs 360.99 billion for the previous year.

Agriculture allocation up 58%
The government plans to introduce futures trading in edible oil, oil seeds and their cakes.

IT rate stays, but exemption limits up
The level for income tax exemption has been increased from Rs 40,000 to Rs 50,000, standard deduction from Rs 20,000 to Rs 25,000 for income up to Rs 100,000. No change has been proposed for salary earners having income between Rs 100,000 and Rs 500,000.

Rs 90 billion for subsidies, up Rs 1 billion
The sugar subsidy has been retained at Rs 4 billion while the subsidy on indigenous nitrogenous fertiliser has been reduced from Rs 66 billion to Rs 60 billion.

Petroleum products prices up
The cost of petrol in the four metropolitan cities of Bombay, Calcutta, Delhi and Madras will range between Rs 26.77 per litre to Rs 31.36 with immediate effect.

12 new service taxes
The taxes have been levied on architects, interior decorators, management consultants, chartered accountants, cost accountants, company secretaries, private security services, real estate agents and real estate consultants, market research agencies, credit rating agencies, underwriting agencies and slaughter houses using mechanised means for large animals.

Non-lapsable fund for North-Eastern states created
Funds will be deposited in the pool from all the ministries where the plan expenditure on the North-Eastern region is less than 10 per cent of total plan allocation of the ministry. The difference between 10 per cent of the allocation and the actual expenditure incurred on the North-Eastern region will be transferred to the pool.

'This disappointing Budget ignores India's changed economic environment after the nuclear explosions'
'The finance minister should have shown leadership and imagination and should have introduced measures to suggest that we are prepared to face the new world,' says Dr Arjun Sengupta.

'The opening of the insurance sector does not necessarily exclude foreign participation by means of joint ventures with Indian companies'
'The battle is not yet lost, but it will remain an uphill battle and things like the bomb doesn't help. India must create an image in the international investor community as a safe, yet attractive long term investment,' says George Otto, Chief Representative, Allianz AG, a leading insurance company.

'The Budget is inflationary and will hit the poor sections'
Prof Madhu Dandavate, former finance minister, says the effect of sanctions were not taken note of and says that whether sanctions will come in or not depends upon how India conducts itself.

Sinha aiming to widen tax base
Many new schemes such as Saral, Samman and Samadhan have been introduced.

An inflationary Budget which will not encourage consumer spending
Businesswoman Kiran Majumdar Shaw feels it is 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.

'The Budget is probably going to be a fiscal disaster'
Economist Ajay Shah points out that there is too much spending in the Budget, with projections based on a 14 per cent nominal growth in GDP. That is hard to obtain in the best of times, needing 6.5 per cent inflation and 7.5 per cent GDP growth.

'It is a very supportive Budget'
Captains of industry have warmly welcomed the Budget and its provisions.

'Indian industry must be made to face global competition'
Rajesh Shah, CII president, hails the Budget which creates conditions for capital expenditure for infrastructure sector.

Sinha hopes energy, transport outlay will fuel growth
The plan outlay for the key infrastructure sectors of energy, transport and communications has been raised by 35 per cent to Rs 611.46 billion from Rs 452.52 billion.

'The vulnerability of the Budget is likely to be revealed by the impact of the excise and customs burden'
'Certainly, this will create cost pressures on certain segments of industry and may aggravate inflationary pressures. In recent weeks, the inflation rate has been going up -- it is already around 6.4 per cent on a year-on-year basis,' says S S Bhandare.


BSE: 3642.68; Sensex plunges 151 points after Sinha presents Budget

NSE: 1053.75; Budget wipes out early Nifty gains of 43 points

Highlights of the Union Budget May 31

Sell the public sector units to raise revenue: Rahul Bajaj
'You cannot cut subsidies because it is politically expensive, you cannot increase fiscal deficit, you cannot allow inflation to go up. So the only way to raise revenue, of up to Rs 200 billion, is to sell the PSU. Then you can increase expenditure to revive the economy.'

Increased defence and sanctions can cost up to Rs 100 billion'
Economist S S Bhandare, in an exclusive interview, also points out that if the government decides to slash cut its employees like China is doing, there will be a revolution.

The Budget can be a great opportunity
Dilip Thakore says that India's two most important problems are mass illiteracy, which hurt productivity, and the public sector enterprises, which run mostly in losses and consume resources.

May 30

'In a globalised economy, we do not have the freedom to choose our own tax structure'
'China has a low income tax rate... If you have a 50 per cent income tax rate and China 30 per cent, people will prefer the latter,' argues Madras School of Economics Director, Dr U Shankar, urging the government to take long-term measures to attract foreign investment. ''India needs a lot of money for infrastructure... We can modernise India in just four or five years if you have good communication facilities.''

Rail budget hikes passenger fares across the board
Second class fares and first class including AC fares have been hiked. Freight fares hike is divided: some have gone up, some inculding foodgrains have not.


'Expect an economic explosion on June 1'
Mahesh Nair points out how, after Pokhran, the government went into an economic overdrive, and says that the Budget will be another blast to boost foreign investment.


'I hope economics will be back on BJP's agenda soon'
'There is a certain level of growth in the economy -- whether you have an active government or an inactive government. I have no reasons to believe that the level will go down now. But the issue is how that level can be nudged into 6.5 or 7 per cent,'' says Ashok Leyland Limited Managing Director R Seshasayee, seeking the government's support -- not protection -- for the Indian industry, in this pre-Budget interview.

May 29

Put economy back on 7 to 8 per cent growth path: Economic Survey
The Economic Survey for 1997-98 calls for fresh initiatives to do away with the "inspector raj" and to necessitate raising of savings rate to about 30 per cent of the GDP. It also seeks an improvement in the infrastructure areas like energy, transport and communications.

Govt's last chance to do the right things, feel stock markets
The country's dismal economic outlook, downgrading by international rating agencies and fear of more stringent sanctions.... ''This is a great opportunity. I believe that India can really put up a fight only for another six months,'' says K R Bharat, director, Credit Sussie First Boston.

Assocham calls for retention of direct tax slabs
The Associated Chambers of Commerce and Industry has opposed any move to introduce higher slabs and surcharges for the 'super rich'.


'India can achieve 8 per cent growth'
George Otto, representative of one of the world's largest insurance company Allianz AG, on why foreign investors are now eyeing India, his expectations from the Budget and the sanctions.

May 28

'My concern is not inflation or the fiscal deficit, it is getting into a positive growth cycle'
Madhur Bajaj, president of Bajaj Auto Ltd, feels that the forthcoming Budget must focus on reviving the economy by increasing expenditure on infrastructure.

Railways may land in debt trap if borrowing ignores profitability: minister
Presenting a status paper on the Indian Railways, Nitish Kumar said it should be decided whether the transport sector in general and the railways in particular needed to align their respective growth strategies with the growth of the national economy.

May 27

Swadeshi may get the boot as BJP tries to open up insurance
Sanctions seems to be forcing the saffron coalition to discard its policy on the insurance sector. ''The nuclear test is the biggest shot in the arm for the hardcore swadeshi lobby,'' said a BJP leader, justifying the move. ''So that is enough to keep them happy."

Incentives to bring infrastructure boom
Serious thought is being given to the introduction of a modified Voluntary Disclosure of Income Scheme. This is expected to increase the flow into the infrastructure sector as no questions would be asked about the source of income, like in the earlier VDIS introduced by then finance minister P Chidambaram. The scheme had netted Rs 100.50 billion.

Food subsidy may be hiked marginally
The Interim Budget did not increase the food subsidy, maintaining it at the revised Rs 75 billion level.

May 26

'The nuclear explosions give the impression of a stable government'
This might be the best chance for the BJP government to go ahead and take some tough decisions in the forthcoming Budget to help the country become an economic superpower, says R C Bhargava, former managing director of Maruti Udyog Ltd.

After Pokhran, government prepares for Budget session
The Budget session begins on May 27 and will last till July 29. The Railway Budget will be presented on May 29, and the general Budget on June 1.

Insurance employees to protest against opening up of sector
Insurance employees do not want LIC or GIC privatised, they do not want private insurance companies, and they certainly do not want foreign companies in the sector. They have claimed that competition will hurt their service to the rural poor, that that they are capable of meeting all the country's requirements.

May 24

Bechtel, Mitsubishi must storm India
The entry of such construction industry giants needs to be encouraged. False notions of unwarranted national pride and self-reliance which have deprived the overwhelming majority of the most basic necessity of housing for over four decades need to be given a quick and speedy burial, writes Dilip Thakore.

May 23

PM's five-point plan to accelerate growth
The highlights of the plan are: top priority for the science and technology sector with special emphasis on software development; emphasis on doubling farm production within the next decade; higher priorities for health care, drinking water, education and sanitation; higher allocations for infrastructural development including roads, ports, airports, power and telecom sectors, and equitable distribution of water resources.

Budget to level playing field for Indian industry
The government hopes to achieve this by correcting existing anomalies in duties, and include provisions for deferred duty payment for specificied companies (subject of course to revenue safeguards), besides an overhaul of the anti-evasion machinery.

Govt told not to use PSU disinvestment to meet budgetary deficit
The disinvestment process in the public sector undertakings should be delinked from the budgetary process in case the stock is sold through the capital markets, said the department of public enterprises.

'Allow banks to operate in badla market'
Making this plea in a pre-Budget memorandum to Finance Minister Yashwant Sinha, the Federation of Indian Stock Exchanges has said that income tax benefits should be offered to encourage investment in stocks. The FISE is promoted by 18 stock exchanges in the country.

Open up insurance: CII
Urging the government to liberalise the life and general insurance market, the Confederation of Indian Industry has said that the Insurance Regulatory Authority bill should be reintroduced.

May 22

CII's 15-point plan targets 7 per cent growth
The present growth rate is less than five per cent, according to a study conducted by the Central Statistical Organisation.

May 21

Budget may focus on savings, spare tax structure
In the area of direct taxes, it is expected that the government may retain the existing rates. The BJP-led coalition's national agenda for governance has laid stress on stepping up savings. The Budget is, therefore, likely to provide incentives for savings. It is likely that the Budget may come out with fresh initiative in the housing and construction sector which has great potential for generating demand in a large number of industries while creating largescale employment. bomb

Rail Budget to focus on modernisation
The other objective of the Railway Budget for 1998-99, to be presented to the Lok Sabha on May 29, will be to develop the railways in the backward areas.