Shri Prafulla Chandra Ghadai – Hon'ble Finance Minister of Orissa
Artha Shastra - Union Budget, 2006-07 @ XIMB
 

Is a budget so important that we need to have panel discussions and days of channel and various other media's coverage for the same? Should it not be just another government activity or undertaking just the way it is in U.S. of A and many other developed countries. I believe India is heading towards the same era where budget will no more be an event but just another government activity. In my view, this budget echoed on same lines.

Well each one of us had our eyes and ears alert and upright when the Hon'ble Finance Minister Mr. P.Chidambaran presented the budget yet again, this time the last budget for the 10^th five-year plan.

The Hon'ble Finance Minister Mr. Ghadai shared his views on the Union Budget. He felt there was a lack of proper strategy to achieve 8% consistent growth in the budget. This kind of growth requires consistent growth of 3-4% in the agriculture sector which can be achieved if states are given grants for enhancing the same.

He also said that there was no major new programmes initiated only some modifications and re-christening of schemes which were introduced by our respected ex-Prime Minister Mr.Vajpayee's government. He had expected that there would be some outlets for the States which are lagging behind to remove the existing disparity among states but he was disappointed on these grounds. Electrification norms were welcomed by him. He also felt dejected as Orissa even though possessing the 2^nd largest coal reserves (40000 mn tons after 60000 mn tons of Jharkhand) and port facilities and location advantages, was not a part of the Mega Power Project.

He also gave some insights into the State budget he had presented. He seemed positive for Orissa's future as a large number of industries are entering into the state, with 13 already started producing and 7 soon to begin.

We had an informed and diversified panel consisting of Mr. Anil Ratanpal, General Manager IDBI, Mr.A.K.Sabat, Chartered Accountant and Mr. Dillip Satpathy, Journalist. The moderator for the evening was Dr. D.V. Ramana, Professor in Finance Department of XIMB.

Dr.D.V.Ramana put some concerns for the panel to address to. Firstly he felt that it is very important to have inflow of investments and also efficient use of the same to have 8% growth. These inflow of investments are 72% from revenue receipts alone and tax contributes 58% in that 72. The loan and interest payment form 26% of the budget where the major part of loan is repaid as interest alone, so is it worth taking those loans. He also wanted the panel to clarify the implications of Fixed Deposits being eligible for tax benefit.

Mr. Anil Ratanpal gave us the bankers point of view. He suggested that there are hardly any major changes in the budget. The focus should be on fiscal stability but the intention must be to keep the growth rate at 8%. Fixed Deposit tax benefit was something that the banker committee felt was long overdue and a heed paid to their plea. He felt this budget didn't have negative impact on maximum industries. To conclude he said that it is a continuing budget, primarily growth oriented, pragmatic, rooted with objective of achieving the growth rate and economic reforms. "This is a budget which has met the need of the time today."

Mr. D. Satapathy said the direction of this budget was 3 fold, growth, equity and social justice. He spoke about the impact of the budget on major industries. He gave us a detailed data about the various figures of the budget and their implications. He rounded off by saying "How will you balance your budget overnight, put tax on sales."

Mr.A.K.Sabat was the last and most humorous speaker who spoke on direct taxes and gave us insight from a point of view of a chartered accountant. He said that he views a country like a company whose Chairperson is Mrs. Sonia Gandhi, MD is Dr. Manmohan Singh, Director of Finance is Mr. P.Chidambaran, supported by Mr.Montek Singh Ahluwalia. He quoted Benjamin Franklin "Nothing is certain but death and taxes." Mr. Sabat went to meticulous evaluations of various provisions and their loopholes. He discussed from the reasons black money had started circulated in the markets in India to the high margin in unorganized food market which goes untaxed. He was doubtful where the money for the investments allocated would come from if collection from tax alone was Rs. 6000 cr. and other avenues remained untapped. He summed by saying "Capital asset created correctly will give future results for this nation."

Neha Chandgothia
Core Committee, Illuminatix
The Media & PR Cell
XIMB
+91 9337664164
www.ximb.ac.in/~media
media@ximb.ac.in
 

Source: E-mail March 6, 2006

published on IndianMBA.com on March 7, 2006

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