Thursday, March 03, 2005

Budget 2005-2006

Overall, everyone is happy with PC's budget. Many of you guys would have already read about it in the papers. India Inc. is very happy, stock markets shot up by 144 points on budget day. However there was this one person who wasn't too impressed with it. It was my uncle and he works for a bank. My uncle and I always had good discussions about the budget when I was in Madras and we still do have those discussions but its now through emails.

I would like to present his criticisms here, as it would make for some interesting reading.

****As usual with any Budget of Chidambaram, it is eloquent in English but empty in figures. He wants to establsih Bharat Nirman without Capital. Gives Tax Relief for every one but wants to Tax if they withdraw cash more than Rs10000/ from the Bank. Also wants details of all deposits where withholding tax is not deducted. He wants to ride on the back of the Bankers to get hold of tax evaders. In India you have to pay fine as tax for doing something wrong and tax as fine for doing something right.This Budget makes no effort to reduce the Fiscal Deficit. He has not brought any reforms on labour. Harping on 100 % FDI is o.k but how will foreign investors think about investing in an India without infra structure. He says Banking in India is a picture of paradox? These are the same Banks which brought about green,white (Milk) Revolution in the Country. These are the Banks who lend when there is aTsunami tragedy or a Bhuj Tragedy. Will HSBC or Citi do it? They will term it commercially unviable and will probably throw in a few dollars as charity and tell the world that their deepest sympathies rest with affected countries. He is more interested in selling the Indian Banking system to American Banks. Here is a Country with a Finance Minister who is more interested in selling the banking system to foreign vultures in the name of liberalisation. What a paradox? What about the desalination plant in Chennai? With 12 minister and 40 Mps Tamilnadu, I cannot even think of drinking water.It is a pity.****

If you guys were wondering what Bharat Nirman is....this is the link

And Fiscal deficit in simple terms means that you spend more than what you get.

And FDI is foreign direct investment. If GE sets up a facility in India it is considered as a foreign direct investment. I am not sure about this but I think foreign bodies(FII) investing money on the Indian stock eschange are considered FDI too.

Well, my uncle has expressed his frustrations with the budget as a Chennaite banker. I kind of agree with whatever he has to say. The most ridiculous thing that I found about this budget was "Why should I pay 10 rupees as tax for withdrawing 10000rs?" If the only reason for that is zeroing in on black money....then PC please wake up, people do not keep their black money in their bank accounts.


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