Rediff On The NeT
May 1999

    BUDGET 98-99
    BUDGET 97-98
No debate on Rs 2 trillion Budget!
Finance ministers, past and present, lament the passing of the Budget in Parliament without any discussion.

Budget gets a 'life'
Political parties agree to pass the Budget in Parliament without any amendment and debate.

Saving Sinha's Budget
Chambers of industry, commerce and trade urge political parties to save the country from financial chaos and constitutional impasse by passing the Budget at the earliest.

AIADMK-BJP face-off: What will happen to the Budget now?
The appropriation bill has been passed. But the finance bill has yet to be ratified by the Lok Sabha. Meanwhile, the AIADMK has withdrawn support to the Union government. Will a Vote on Account become necessary?

Better than last time, but still a gamble
Can growth rates pick up? Can the government be downsized? Can swadeshi and videshi be welded for economic harmony? Budget's fineprint in extreme close-up.

'Focus will be on infrastructure, exports, capital markets and NPAs'
'Budget will surely try to stimulate the capital market. We may see the re-introduction of the section 88C wherein 50 per cent of the money put into the new issues was exempt from a person's income,' says CMD of Punjab & Sind Bank, S S Kohli.

'Yashwant Sinha is on a tough batting wicket'
'Economic Survey has made a beginning toward a cut in government spending and borrowing. The Budget may be a new one in terms of giving direction to all the Budgets to follow,' says CII director-general Tarun Das.

'It's up to the financial institutions to ensure they fund only viable projects'
'The economy is sliding down. The GDP growth is down, industrial growth is down. Unless we take some harsh decisions, we will go nowhere. I'm sure the finance minister will address the harsh issues in the Budget,' says former IDBI chairman S H Khan.

Marketmen look forward to a not-so-tough Budget
There was no control on government's expenditure. Its market borrowings soared from 9.2 per cent of GDP in 1997-98 to almost 54 per cent in the current year. This will exert an upward pressure on interest rates in the short run, say analysts.

Don't expect Sinha to come up with a path-breaking Budget
'The finance minister has to effect bold and unheard-of economies in expenditure and tap unheard-of sources in raising revenue. Putting the enlarged kitty to gainful use is only the second part of the exercise,' says Arvind Lavakare.

Crash a feature of Budget-time stock indices
Sectors like information technology, cigarettes, food processing, computer hardware and solvent extraction emerged as prominent gainers in the last five years.

'Foreign investors' perception of India is extremely important'
'Economic crises of the Brazil kind are occurring not because the fundamentals of an economy have weakened, but because of sheer sentiment. Today, with one punch on a key, people are transferring billions of dollars from one market to another. And nobody gives a damn about what happens to the economy of the country,' says Finance Minister Yashwant Sinha in a tell-all interview.

Time for tough measures to tackle fiscal travails
An administration that is squabbling over small issues like fertiliser subsidy cannot muster courage to tackle tougher issues like rupee devaluation. Tighter policies will have to be in place to keep domestic prices on the leash, writes R C Murthy.

'Where we want investment we have hurdles; where we don't want investment, we have high profitability'
'To control the fiscal deficit, the government borrows massively from the banks. In turn, banks hike the interest rates. Indian industry borrowing at such high rates becomes uncompetitive and thus exports suffer.' An exclusive interview with economist Dr Isher Judge Ahluwalia.

Apparel exporters seek duty-free import of machinery to join the global markets
Increasing competitiveness and the advent of the WTO business regime would require complete modernisation of the garment industry, exporters said in a note to the finance minister.

Bakht says harsh Budget not ruled out, despite Chautala
The industry minister said the Budget is being prepared with an open mind as the government has to perform according to the demands of the economy under any circumstances.

Pre-Budget poll: Analysts see fiscal deficit of 7 pc of GDP
The most disturbing trend, experts said, is the extent of the deficit being funded out of market borrowings which increased from 49 per cent in 1997-98 to 57 per cent in 1998-99 and expected to hit 60 per cent in 1999-2000.

Increased budgetary allocation for Railways unlikely
Freight movement and revenues are on the decline. Dependence on market borrowing and the private sector for funds is not the best solution. Nitish Kumar may be forced to hike passenger fares and freight tariff at a time when elections loom over ten states.

No plan to tax farm income in Budget, clarifies BJP
The party is of the view that agricultural production is dependent on vagaries of nature and hence there is no reason why the practice to exempt farm income from taxes should be discontinued.

Economists see through the politics and the business of Budget
'A deficit by itself is not bad. The deficit in India is caused by wasteful expenditure like higher salaries that has no returns. All the political parties, including the Congress and the BJP, supported the Fifth Pay Commission recommendations. And today, we have to pay the price for this lack of political courage.' A debate on Budget.

'Don't hike i-tax slab rates': Jaya lists dos and don'ts for Budget
Farmers are doing a national service by giving us self-sufficiency in food. So, they should be rewarded and not penalised, the AIADMK supremo said while speaking against proposals to tax farm income.

Last chance for Sinha to right economic blunders
For 50 years, the neta-babu combine kept education in the footnotes of India's economic agenda. This year, the Finance Bill should provide for sale of PSUs lock, stock and barrel to raise resources for social infrastructure. Else, this will be the BJP's last Budget, writes Dilip Thakore.

Pre-Budget market bears sexy Sensex
The filmi gyrations of India's premier stockmarket index will continue. Animal instincts are likely to show up as a bull-bear face-off looms over the bourses.

Cut direct tax rates, tax farm income: FICCI
The government can earn high revenues and reduce fiscal deficit by enlarging the corporate tax-base. At present, only 3,500 companies pay 85 per cent of total excise duty amount collected by the government, Sudhir Jalan said.

Economist urges no-tax on equities sale, concessions to infrastructure investors
Scrap capital gains tax on the proceeds of corporate mergers, acquisitions and other forms of restructuring. Equity must rescue us from the perils of rising debt burden, Fredie Mehta said.

'Why should there be a government monopoly on procurement?'
Why should the tuition fees for the university students be less than the private school fees? Why should those who can afford enjoy subsidies like this? Why should everybody get rice at Rs 5 a kg? This is what you call undeserving subsidy, says Dr U Shankar, director of the Madras School of Economics.

Packaged tea segment reels under excise duty, seeks relief in Budget
The eight per cent duty has affected consumers across all income strata, the Tea Packeters Association of India said in a petition to the ministry of finance.

Budgets must be forward-looking. Are they?
The budget by its very nomenclature is to be forward looking. In the sense that it deals with spending over the following 12 months. In practice, the policy decisions announced in the Budget are being acted upon at the fag end of the year, points out R C Murthy.

What has Budget got to do with the common man?
Ever since liberalisation, budgets have brought the so-called common man nothing but inflation and unemployment. Unless the finance minister comes up with a radical new strategy for growth, his budgets will cut no ice, writes Jay Dubashi.

Fertiliser body warns govt against bringing back customs duty on machinery
The government must take a bold decsion to raise the urea prices by ten per cent every year in the next few years till the subsidy could be kept at manageable levels, the Fertiliser Association of India said.

Sinha's pre-Budget strike: prices of wheat, rice, sugar, urea hiked to prune fiscal deficit
Justifing the increase, the government said that there had been no increase in the price of essential commodities in the past two years while procurement prices had gone up considerably, forcing it to provide more subsidy on the PDS items.

Budget to break convention on Feb 27 at 1100 hrs
The time suits the Union finance ministry since most of the budget levies come into effect immediately, leaving no chance for speculation in the commodity or stock markets.

Consumer bodies seek excise relief for packaged goods
They criticised the recent reduction of interest on small savings as this affects the small investors. They demanded reversal of the decision.

Low interest tax regime, revival of capital markets are priority issues, FM tells FIs
Indian financial institutions said small savings interest rates must be linked to the bank rate and deep discount bonds introduced. An offshore financial centre in Bombay must be created to attract foreign savings.

Industry captains urge FM to focus on medium-term perspective
Industrialists also stressed the need to devise and put in place tax measures, which promote restructuring of the companies through mergers, acquisitions and consolidation.

Economists moot corpus for education and health in budget
The experts also recommended measures to mobilise Non Resident Indians' savings to take care of currency fluctuations and decline in the flow of foreign institutional investors' investments.

Why Budget was advanced to Feb 27
The finance ministry landed in a dilemma as February 28 happens to be a Sunday.

Insurance bill may not be passed even in budget session
This is so because no time-frame has been set for the standing committee on finance to complete the dissection and analysis of the bill.