'Good for breakfast, short for lunch'

'Reduction in I-T rate and removal of exemptions are likely to increase the net IT revenues for the state'

A panel of experts has described Finance Minister Arun Jaitley’s Budget for 2015-16 as one that’s “Good for breakfast, short for lunch”.

At a discussion on the Budget, organised by the Indian Institute of Management, Bangalore, (IIM, Bangalore) the panel appreciated Jaitley for presenting a balanced one, but rued that despite the hype around manufacturing, policy steps to promote the same are missing.

“This is a good budget from a long-term perspective. It has lofty intentions, but implementation strategies are inadequate and funding is doubtful. Despite the ‘Make in India’ sloganeering, there are no creative inputs to support this, so manufacturing is unlikely to pick up,” declared S Raghavan, former Senior Vice-President and Member, Exel Management Committee, L&T Ltd.

Observing that short term effects on the economy were not growth-oriented, he pointed out that corporate I-T would in fact go up to 34.6 per cent in 2015-16. “Reduction in the I-T rate and removal of exemptions are likely to increase the net IT revenues for the state,” Raghavan remarked. He added that if constraints on black money transfer abroad did not stop, the outflow expected on infrastructure investments would not happen. He was speaking during a budget analysis by a panel, hosted by IIM-Bangalore, on Saturday.

The panel discussion centred around macroeconomic aspects, taxation issues, stock market analysis and overall impact of the budget on industry.

Other panelists were V K Viswanathan, Chairman of the Board of Bosch Limited, B P Rao from B P Rao & Co, Charted Accountants, V Ramu Sharma, Chairman, Bangalore Commodities Ltd, and Charan Singh, RBI Chair Professor of Economics, IIMB and moderator of the discussion.

Charan Singh said, it was “an excellent budget”, given the policy directions that it has provided to important issues like debt management, monetary policy framework, gold policy, bankruptcy laws, black money and social security. “The clarity on implementation of the goods and services tax, and support to the MSMEs, in terms of finances and skill development are other positive factors. As true for anything, more specifics could have been provided on reduction on subsidies, increasing tax compliance and labor laws,” he added.

“Overall, this budget is good for breakfast but short for lunch,” remarked V K Vishwanathan. Describing Budget 2015 as “balanced”, he said the Finance Minister was walking the talk on stability and non-adversorial tax regime and abolition of wealth tax was quite a bold step but replacing it with an increase in surcharge for super rich may prove counter-productive. Again, he was quick to point out that policy measures to boost Make in India were “half-hearted and inadequate”.

V Ramu Sharma described it as a “budget that is furthering the cause of Swacch Bharat” through plans to eradicate black money, making it easier to do business in India, and making the country a job creator. However, he did point out that the budget has also increased direct and indirect taxes, and had no specific thrust to stimulate domestic consumption, and hence would do nothing for boosting manufacturing.