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Union Budget 2005-06 Analysis by X-Fin, XIM Bhubaneswar He welcomed the setting up of the National Urban Mission to improve infrastructure in 7 notified cities and said that there was some invitation for the private sector to invest in this project. Overall, he stated that the budget was short on realism and implementation was a major challenge. He raised doubts about where the government was going to raise the funds and how efficiently they would be able to manage these funds. He also doubted the government claims about an increase in corporate tax compliance due to reduced rate. The conclusion of Mr. Roy's speech brought on dais Mr. Sabath, who in a very humorous way raised several doubts about the budget. He also raised doubts about the revenue model of the government and termed the budget as a politically right one. He pointed out that several controversial decisions were passed before the budget itself. The example he gave was that of the cabinet meeting sometime in December where a resolution was passed to setup the National Investment Fund, which would oversee the disinvestment of 1-49% of the government's share in several PSU's. He also predicted that the FII this year would cross 15 billion dollars, which is a vast improvement over previous fiscals. Being a Chartered Accountant in the field for about 40 years, it was only natural for Mr. Sabath to discuss the tax reform. He made a very interesting observation about the FM, Mr. P Chidambaram, that the finance minister s known for introducing new taxes. He took empirical examples from all 3 previous budgets of Mr. P. Chidambaram and stated some of the new taxes, which were introduced, some of them being Securities Transaction Tax (STT), Bank Cash withdrawal tax and other such taxes. Another point raised by Mr. Sabath was relating to the Bank Cash withdrawal Tax. He raised doubts as to whether it would ensure to curb the flow of back money. Contributed by - |
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