Union budget non-committal on disinvestment, say experts

The Union budget for 2009-10 is non-committal on the issue of disinvestment of the public sector undertakings (PSUs) in the country even though the fiscal deficit has been projected at 6.8 per cent of the GDP for this fiscal.

This observation was made by the experts in the areas of taxation and finance at an interactive session on Impact of the Union Budget 2009-10 organised by the Orissa State Council of the Confederation of Indian Industry (CII). “The Union finance minister has refrained from going into the specifics of the disinvestment process of the PSUs. The budget merely says that the Centre would raise Rs 1,200 crore from the disinvestment process in 2009-10”, said BL Bagra, convener (finance and taxation panel) of CII’s Orissa State Council. AK Sabat, a city-based chartered accountant, said, “In the Economic Survey, the Union finance mister said that the Centre would raise Rs 25,000 crore every year to reduce fiscal deficit which is projected at 6.8 per cent of the GDP for this fiscal. However, the budget makes no mention of the manner in which the government would go for the disinvestment of the PSUs.”

Moreover, this year’s Union budget has nothing to offer for the nation’s middle class which has been hit hard by the spiralling prices of essential food commodities, he added.

Speaking on the occasion, Rajeev Mawkin, head (taxation) of CII-North said, “The Minimum Alternate Tax (MAT) has been raised from 10 per cent to 15 per cent and this is not a comfort signal for India Inc. Moreover, new services like transportation of goods and services through railways and goods transported through inland waters have been brought under the ambit of service tax. This measure is going to hit the export oriented firms in the country.”

Mawkin pointed out that the budget has increased allocation under various Centrally sponsored schemes meant for the rural masses but there is no monitoring mechanism to ensure the successful implementation of these schemes.