Dear All; Ashok TN has donea great service by offering a much needed perspective on the Budget 2009.Bust time politics is different from boom time is well said. friends,
Stock market is important in Indian economy in a limited way.Unlike the developed economies, majority donot have a stake in share market and Pesnion funds and such other public funds are yet to ahve a stake in it to make an impact on average citizen.
This budget has fortunately come around the monsoon that is failing.It impact on grwoth will be felt in the long run.Thebudget therefore is like work in proogress.
Important:If one analyses the budgets of the past and lists the announcements made and actutal action taken on such annoucements,
As Information adviser to PM,I used to make a list of budget announcements and send them to PM so that he keeps track of announcements and their implementation.
Do you know why?
Fianance ministers tended to grab limelight by making announcements relating to other ministries and depratments and those ministreis used the budget to float many intentions and ideas which had not been fully worked at.Also finance minsiter's often wanted to force other ministreis to move in certain directions.As a result the ministries concerned were not fully politically committed to the idea.
Example:Project for Desalination for Chennai.The President Of India was keen on it.Chidambaram announced the project and allocated Rs900 crore in Budget.TN Govt and vested interests sellign water were not keen on it.Hence no money was spent.
Narendra
there has been much heat and debate on the 2nd budget presented by UPA by both the people , corporates and so called pundits and analysts sitting in newspapers.
here is my take on the budget both as a journalist, corporate consultant and public affairs advisor.
First, dont compare Pranab da's budget with Chidambaram's budget. both were presented under different environment. Chidambaram is boom time and Pranab is bust time.
Second , stock markets nosedived on the first day of Pranab da's budget. Stock markets are not a true indicator of a country's economy. They only show you the trends of hot money , portfoio investments which are prone to capital flight at the slightest economic disturbance. India depends on FDI which is more than 60% and they are tied and cannot be pulled out easily.
Story is stock market dipped 700 points on first day of budget because according to Rakesh Jhunjhunwala, there was no announcement on FDI, no firm statement to tackle recession, securities transation tax was not scrapped, dividend distribution tax was not abolished. Yes could scrapped dividend istribution tax, it has led to unnecessary double taxation for corporates and other players. securities transaction tax certainly cannot be scrpped because it is a major revenue earner for the government judging by the volume of transactions in the stock markets.
Fact, Pranab da could not have made a statement on FDI because, most foreign players are trying to take money out of india to settle debts at home. Only when they are strong at home will they ring back investments into india. so no point in making any forward looking statement or polocy right now.
Dada has clearly said budget is not a one time exercise and that announcements can be made outside also.
The budget has given only marginal reliefs to income tax payers. People expected exemption limit to be ushed to 200,000 . Yes, this was belied. But you cant blame the govt because the entire budgetary exercise was to the appease the rural folk , NREGA, 25 kgs rice programme, rural employment, etc.
Funding for infrastruture at rs 100,000 crore poor, no doubt, because infrastruture needs $200 billion of which power sector alone will suck up a majority portion.
A budget presented at a time of joblessness , recessionary trends, low growth and high fiscal deficit and burgeoning non plan expenditure, cannot make bold statements because there is no economic or federal reserve backing. It has to be cautious and dada made the best budget under the circumstances, as the comedian vadivelu and vivek often say, ESCAPE, he did that with satisfying the rural masses and giving fringe benefits ( fbt was scrapped, surcharge was scrapped) to the people and corporates.
TN Ashok, ex Economics Editor, ex Executive Director , Communications , ALSTOM grup of companies.
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