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Press Release: 10th July, 2004 In one line the budget can be described as reforms with a human face or as one journalist has aptly put it "Daridra Narayan in a three-piece suit". The emphasis on education both primary and elementary without cutting higher education accentuates the human face of the budget. The focus on agriculture is not tokenism. People expected allocation of money on various heads but instead the budget diligently operated in the signal and reform characteristics and focused on increasing the credit and private investment in agriculture and modernizing agro-processing to make it more worthwhile. The finance minister has done a tightrope walk by committing investment wherever required. The FM has shown a decreased revenue deficit by assuming extra-ordinary buoyancy in tax collection to the tune of 24% and increase in arrear collections from taxes. Dr. Ranganathan further said that the abolition of LTCG tax is a step in the right direction. He clarified that the FII's will not be affected by the turnover tax or the Tobin's tax as it is called. And the markets will come to terms with it. The issues, which are debatable, are raising the taxation exemption limit to Rs. 1 Lakh. This move will reduce the number of taxpayers from 3.4 crores to 2 crores. He said that subsidies have made the attitude of the people like that of a beggar. If some tax is charged the opposite will happen and the attitudes of people will change. The raise in private and foreign investors investment limits to 49% is mere tokenism as the management control still lies with the GOI. He further said how the government is approving disinvestment covertly by specifying that only those profit making PSUs who perform well in competitive markets will not be privatized. The tax net has been broadened to the services sector. Dr Ranganathan concluded by saying that the government must be hardheaded towards privatization and restructuring. If the PSU improves its performance then its stocks will fetch a better price. The next speaker was Mr. A. K. Sabath. He started on a humorous note by giving new full forms to CMP, i.e., Congress Marxist Programme and Chidambaram Manmohan Programme. Contributed by - |
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