Rahul Bajaj advocates a growth-oriented Budget

Strongly advocating a growth and investment spurring budget for the year 2002-03 leading industrialist Rahul Bajaj has urged Union Finance Minister Yashwant Sinha to check fiscal deficit under 3 per cent.

Talking to newsmen at the CII Partnership Summit, he did not favour any further cut in direct or indirect taxes but, however, suggested widening of tax base, especially in service tax.

Bajaj was highly critical of the escalating fiscal deficit that would cross ten per cent taking into account the fiscal deficit of the states also and said that firm steps should be taken to downsize the government as also hasten the divestment process.

He said the target of the government should be to raise about Rs 300 billion from divestment as against Rs 120 billion targeted for this year. Even this would not be achieved this year.

He said the hype on information technology and pharmaceuticals sector should be displayed in other manufacturing sector also if the country need to spur employment and show a 8-10 per cent growth.

To achieve this the government should implement the labour reforms at the earliest and put in place the second phase of reforms. A healthy and growing manufacturing sector would reduce the unemployment burden of the country and improve the purchasing capacity of people.

Bajaj severely attacked the government for not passing on the Research and Development cess on automotive industry collected by the industry back to it. Two years ago the collection amounted to Rs 2.80 billion of which only Rs 300-400 million was passed on to the industry.

"This is unethical," he said.

He said the Indian industry could match the aggressive global marketing of China by coming out with quality and cheap products. But the government should come out with a favourable environment and necessary infrastructure including cheap power.

He said through there was some progress in the telecom sector which had been thrown open to the private sector, the condition in roads and power sector was very poor.

He said the government had rightly postponed introduction of value-added tax as most of the states have still not prepared for the VAT regime. Even Maharashtra which was considered to be in advanced stage of preparation was not fully equipped.

However, the government should not delay its introduction beyond October this year, he added.

UNI

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