Pranab Mukherjee, My Main Man: Sid Harth
bademiyansubhanallah
Published on Mon, Jul 06, 2009 at 15:50 , Updated at Mon, Jul 06, 2009
at 20:52
Source : CNBC-TV18
Following is an excerpt of Pranab Mukherjee’s interview that aired on
DD Lok Sabha.
Mukherjee: For instance corporate sector almost everybody talked of
the fringe benefit tax (FBT), I have addressed that. To help the
exporters I have provided the necessary relief by extending the period
of sunset clause particularly in income tax 10A/10B – all these areas
we have addressed the problems. So each sector where support was
needed, we have provided. Moreover we will have to keep in mind that
with the growing aspirations of the people one cannot simply resort to
strict money trading policy and if we make a comparison I understand
the US’s fiscal deficit is going to more than 11%, UK’s would be more
than 16%.
Compare to that India’s 6.8% and I do feel it would be possible to
even when I present the full budget for next year, it would be
possible to improve this situation because if there is a slight
improvement in the international scenario then our exports will pick
up but if the exports go down, manufacturing sectors go down, then
naturally there will be revenue shortage and if you want to step up
the planned outlay – look at the stepping up of planned outlay by one-
year – it is more than 30-33% from Rs 2,43,000 crore to Rs 3,25,000
crore.
Q: You have also crossed the Rs 10 lakh crore mark as far as the total
expenditure is concerned.
A: Yes, total expenditure and total receipt also, of course through
borrowed receipts.
Q: The gap is something that is of concern because it is not very
clear from your speech how exactly that is being financed in the sense
that you have said that the direct tax revenue is going to be flat, it
is not going to be increased. Indirect taxes – the net gain is only
about Rs 2,000 crore.
A: Additional market borrowing I have done – those details are there
in the budget paper.
Q: You have not talked about divestment of PSUs at all.
A: I have given the philosophy of the investment. As and when it will
take place and perhaps it is one of the reasons which market expected
that I will announce – that is not possible. No Finance Minister can
do it that I will disinvest here this, here that. Policy I have
indicated.
Q: That it will be done with people’s participation.
A: Yes that it will done with people’s participation.
Q: The markets have reacted to the budget negatively.
A: I have yet to find out the reason but I am told by experts that in
fact for the last one-month there was lot of hype and in the
expectation people forget the reality. The market expected too much
from the Finance Minister to do by one go. That’s why I at the
beginning of my speech I corrected by saying that one budget speech is
not going to address all the problems and that is not the only
instrument through which the problems can be solved. It can give a
broad vision which we have given. These have to be followed up.
...and I am Sid harth
Sid Harth
New Delhi, July 6 (ANI): Prime Minister Dr. Manmohan Singh toady said
that Finance Minister Pranab Mukherjee has done an admirable job by
reconciling short-term requirements of the economy with medium term
goals.
“I believe he has done an admirable job in reconciling short-term
requirements of the economy with the medium term goals of our economic
and social policy and the commitments that we made to our people in
our election manifesto,” he said.
“He has chosen a strategy to concentrate on increasing investments in
the infrastructure sector both in the public sector and in the private
sector through PPP route,” he added.
“The strategy of the budget is to ensure that our economy recaptures
the rhythm of the accelerated growth process. It seeks to honour in
large measure, the commitments that we have made to our people to work
steadfastly for the well being of the Aam Aadmi,” he said.
Underlying the importance of reducing the impact of the global
slowdown, Dr. Singh said that the growth momentum of economy must be
maintained.
“We should aim to achieve eight to nine percent growth in medium
term,” he said, adding the Budget was aimed at minimising the “impact
of the global recession”.
He said handsome additional allocation has been made for inclusive
growth and other flagship programmes like Urban Renewal Mission and
National Rural Health Mission.
On the increased allocation for various rural programmes such as
National Rural Employment Guarantee Programme for which Rs.39,100
crore has been earmarked and Bharat Nirman for which allocation has
been hiked by 45 per cent, Dr. Singh said, “these are all programmes
which will primarily benefit our rural areas and reduce the gap
between Bharat and India.”
The budget is being seen as a roadmap for how Dr. Singh will govern
for the next five years after his party was re-elected by an
unexpectedly decisive margin, focused heavily on farmers and the poor.
(ANI)
...and I am Sid Harth
Sid Harth
Sid Harth
July 6th, 2009 SindhToday Leave a comment Go to comments
New Delhi, July 6 (IANS) Promising to reinstate India’s high economic
growth, Finance Minister Pranab Mukherjee Monday presented a $204-
billion annual budget with more funds for welfare schemes and
infrastructure, along with a declared “vision” to reach the fruits of
progress to each of the country’s 1.17 billion people.
Acknowledging the rising expectations of a restless, young population
that played a significant role in voting Prime Minister Manmohan
Singh’s government back to power, Mukherjee also promised new
incentives for farmers and a big hike in funding for projects focusing
on rural reconstruction, employment, urban renewal, education, health
and other areas of social uplift.
He also sought to put more money in the hands of the average citizen
by hiking the income tax exemption limit, while assuring a law soon
that will address food security in the country by providing 25 kg of
rice or wheat per month to the poor at a subsidised price of Rs.3 per
kg.
Dressed in a spotless white bandgala suit, the 73-year-old politician
said the new United Progressive Alliance (UPA) government will
continue to push its agenda of “inclusive growth and equitable
development” while meeting the “rising expectations of a young
India”.
In his typical no-nonsense style, Mukherjee – who had presented his
last budget for the Indira Gandhi government 25 years ago – also
resisted the temptation of peppering his 100-minute speech, broadcast
live, with quotable quotes like many of his predecessors, restricting
himself to two couplets from Kautilya, the famous political strategist
of Alexander’s era, and Mahatma Gandhi.
“The government recognises the challenges this task entails,” said the
finance minister, referring to the roadmap ahead of the new government
in countering the slowing down of India’s growth to 6.7 percent in the
past year from over 9 percent in the preceding three.
“The first challenge is to bring back the GDP (gross domestic product)
growth rate to 9 percent per annum,” he said, setting the tone of his
fourth career budget watched by Manmohan Singh and UPA chairperson
Sonia Gandhi.
The other challenges, he said, included better governance and ensuring
that the fruits of development reached across regions to touch the
lives of every citizen – the “aam admi”, the current catchphrase
denoting the common man.
“The finance minister has done an admirable job,” the prime minister
said, soon after the budget was presented in the Lok Sabha. “The main
aim of the budget is to minimise the impact of global recession,”
Manmohan Singh added.
“Overall, the strategy of the budget is to ensure that our economy
recaptures the rhythm of the accelerated growth process.
Simultaneously, it seeks to honour in large measure, the commitments
we have made to our people.”
India Inc, by and large, welcomed Mukherjee’s proposals, given the
difficult circumstances. But it had hoped for some more tax sops,
while expecting a clear signal in the area of selling government stake
in state-run enterprises.
The country’s stock markets, however, thought otherwise and gave a
thumbs down to the budget. The sensitive index (Sensex) of the Bombay
Stock Exchange (BSE), a barometer of investor sentiment, fell by over
nearly points, or 5.8 percent.
In his various proposals, Mukherjee kept the corporate tax rate
unchanged, even as the budget sought to reduce the burden on industry
by abolishing commodities transaction tax and the fringe benefit tax,
but hiked the minimum alternate tax to 15 percent of book profits from
10 percent.
He also promised a pan-India goods and services tax from April next
year and gave 100 percent tax deduction to political donations while
assuring both short-term and medium-term steps to counter the negative
fallout of global slowdown.
The minister enhanced the customs duty on items like set-top boxes,
LCD televisions and premium textile goods to encourage domestic
production and value addition. He also reduced the excise duties on
large vehicles and trucks.
For individuals, the budget sought to raise the income tax exemption
limits for senior citizens by Rs.15,000 and for women and other tax
payers by Rs.10,000, while scrapping the 10 percent surcharge on
personal taxes.
The proposals on direct taxes, he said, would be revenue neutral,
while indirect taxes would yield Rs.2,000 crore for the full fiscal.
Yet, Mukherjee hoped to step up non-plan expenditure by 37 percent to
Rs.695,689 crore (Rs.6,956 billion/$140 billion) over 2008-09 and plan
expenditure by 34 percent to Rs.3,25,149 crore (Rs.3,251.49 billion/
$65 billion).
The total increase in expenditure, thus, is 36 percent, he said, as he
kept the total borrowing plan for the government at a high level, that
will push up the country’s fiscal deficit to 6.8 percent of GDP from 6
percent for 2008-09.
Mukherjee said the government would have to overcome all obstacles and
create a brave new India.
“As we begin this five-journey, the road ahead will not be easy. We
will have to manage uncertainties and there will be as many problems
as there would be solutions.”
Sid Harth
SANJAY K. JHA
New Delhi, July 6: Pranab Mukherjee’s budget ended up highlighting a
deficit —- in the BJP.
The gap showed when the time came for the main Opposition party to
give its reaction to — in other words, rip into — the budget
proposals. The BJP’s trio of economics experts were nowhere to be
seen.
Jaswant Singh, Yashwant Sinha and Arun Shourie, all recently turned
dissident, chose to leave the party in the lurch just when their
services were needed the most. In their absence, the BJP’s formal
reaction to the budget had to depend on vague political rhetoric
instead of specific economic criticism.
Jaswant, Yashwant and Shourie usually analyse the budget before the
media on the party’s behalf. This year, they are angry at the
leadership’s efforts to protect and “reward” those they think are
behind the BJP’s Lok Sabha poll debacle.
So Jaswant left Delhi for his village, while Yashwant delivered a
stinging snub by choosing the media over party. Sushma Swaraj, who
eventually briefed the media, admitted that Yashwant had informed the
party that he was engaged for the day.
Shourie was untraceable. Worse, Murli Manohar Joshi, another leader
who understands economics, attended the House during the budget
presentation but fled the national capital soon after.
Joshi, whose running battle with L.K. Advani has been a constant
source of embarrassment for the party, has, however, expressed a
desire to lead the discussion on the budget in the Lok Sabha. Even
Yashwant will participate in the debate, indicating a plan to register
individual brilliance, thrown into relief against the party’s
deficiencies.
As these leaders’ absence dawned on the leadership, Advani called a
meeting to prepare the BJP’s formal response to the budget. Among
those who attended were Sushma, party president Rajnath Singh, Arun
Jaitley, Venkaiah Naidu, S.S. Ahluwalia, Ravi Shankar Prasad, Rajiv
Pratap Rudy and Prakash Javadekar.
These leaders would have had no problem taking apart any move or
proclamation by the government on a political issue, but none of them
is known for a deep understanding of financial and monetary
intricacies.
The statement issued after the meeting was forced to harp on
commonplace expressions like “lacklustre”, “dry”, “boring” and
“disappointing”. It spoke of past failures to create jobs and
insufficient tax relief, and made the customary insinuation that the
proposals were inflationary.
The BJP said the budget didn’t have anything that would reverse the
downturn, was deficient in new ideas and would not enhance economic
activities.
It accused Mukherjee of squandering a great opportunity but did not
say what the BJP would have done in his place to inject the economy
with new life.
Rajnath raised eyebrows further by issuing a separate statement. It
repeated the same run-of-the-mill complaints.
Sid Harth
A backward step for India and its poor.
India's Congress Party was re-elected in May on a promise of economic
populism that the country can't afford. Yesterday the government
delivered on that promise. This is bad news for India, and especially
for its poorest citizens.
The budget outlines three priorities: 9% economic growth, "inclusive
development" and better public services. It would achieve these
outcomes by boosting spending by 36% to 10.2 trillion rupees ($211
billion), mostly on handouts and infrastructure. No major public-
sector rationalization or private-sector liberalization were
announced.
This is in effect a revival of India's socialist past and a rejection
of the 1990s reforms that gave India the best kind of "inclusiveness":
economic growth. Finance Minister Pranab Mukherjee was explicit about
this political sea change: "Aam aadmi," or the "common man," is "now
the focus of all our programs and schemes," he said yesterday. He
extended a raft of loan and job guarantees to the poor -- programs
that are already eating up around 1.3% of GDP and will only grow.
The budget is in line with party leader Sonia Gandhi's emphasis on
populism, but it's especially disappointing given the track record of
Prime Minister Manmohan Singh, who once upon a time was an economic
reformer. Mr. Singh's boosters claimed his lackluster reform record in
Congress's first term was because he had to rely on left-leaning
political allies to form a governing coalition. Now Congress has
dumped those partners -- and there is no excuse for moving the country
backward.
The great irony is that by extending government's influence in the
agricultural sector, which employs 60% of the workforce, Delhi is only
retarding its growth. India's challenge is to move its poor from the
farm to the factory. The more government shovels subsidies and free
rice at farmers, the less willing they'll be to find other means of
employment. High tariffs and barriers to entry have also stunted
competition and innovation.
Mr. Mukherjee seems to understand some of these ideas, at least in
principle. Yesterday he said private investment was "the principal
growth driver" of India's boom years. Yet he did nothing to ease
private industry's tax burden, cut regulatory red tape or liberalize
the country's restrictive foreign direct investment regime. He also
praised Indira Gandhi's 1969 bank nationalization as "wise and
visionary" and "an inspiration." So much for freeing up capital flows
at a time when credit is contracting.
Delhi's largesse will have serious fiscal consequences. Since the
government isn't cutting back on its own sprawling bureaucracy, Mr.
Mukherjee proposes to sell slices of government public companies to
help finance this spending spree. But the bulk of the funding will
come from bond sales and tax hikes, crowding out private investment.
In the meantime, economists project the outlay will send the fiscal
deficit soaring to more than 10% of GDP -- the largest in almost two
decades.
More worryingly, the Finance Minister implied that there is more
spending in the pipeline, based on the erroneous assumption that
Delhi's last three fiscal stimulus packages were "effective." India's
6.7% growth rate last fiscal year represented a significant slowdown
from its 9% growth the year before. All signs are that the economy is
slowing further in the face of an export collapse and slowing consumer
spending.
There were a few good ideas in the budget. Mr. Mukherjee promised to
simplify the tax code, but he's layering on more taxes before he does
so, proposing, among other things, a goods and services tax. India
desperately needs better infrastructure to facilitate trade, so Mr.
Mukherjee's plan to increase spending for highways, railroads and
other urban public works is welcome. But the broader theme of spending
without constraints or accompanying liberalization is setback for
growth. Mr. Mukherjee said yesterday "the road ahead will not be
easy." He is not making it any easier.
bademiyansubhanallah
Ani July 6th, 2009
NEW DELHI/MUMBAI - India Incorporated today reacted with
disappointment over proposals introduced by Union Finance Minister
Pranab Mukherjee in Budget 2009-10. It said that Mukherjee had
remained silent on key points like the revamp of fuel policy,
corporate tax, and the disinvestment roadmap.
The Bombay Stock Exchange (BSE) benchmark Sensex suffered the biggest
fall on any Budget day and in the year too by plunging over 869 points
on the BSE on concerns at the high fiscal deficit (6.8 percent) set by
the Union Budget.
The Sensex, which started coming down soon after the announcement of
budgetary proposals, dipped below the 14,000-point level before
closing 869.65 points down at 14,043.40, surpassing the hefty fall of
749 points on January 7.
The key index had touched the day’s low of 13,959.44 as all the
heavyweight stocks led by Reliance Industries suffered a heavy loss
6.53 per cent. Besides the fiscal deficit, trading sentiment also
affected as European stocks dipped to a seven-week low on worries that
economic recovery might still be far way off. The 50-share National
Stock Exchange index Nifty also tumbled by 258.55 points to 4,135.70,
after hitting the day’s low of 4,133.70.
Banking sector stocks suffered the most, losing 8.17 per cent to
7,768.63, as ICICI Bank tumbled by 10 per cent and HDFC Bank by 5.88
per cent among lenders as the Budget did not have measures to open up
the industry and on concerns that the borrowing plan will reduce the
value of bond holdings, brokers said.
Apart from the fiscal deficit, the other worry for captains of
industry was the hike in Minimum Alternate Tax from ten to fifteen
percent.
The Nifty also gave a thumbs down to the budget announcements.
Mukherjee left the corporate tax, customs and excise duty structure
unchanged. He abolished the Fringe Benefit Tax which was the bugbear
of the industry. Also, the deadline for Corporate India’s demand for a
rollout of Goods and Services Tax has been set as April 2010.
He left the Securities Tax unchanged but scrapped the Commodities
Transaction Tax. (ANI)
bademiyansubhanallah
Arvind Padmanabhan July 6th, 2009
NEW DELHI - Promising to reinstate India’s high economic growth,
Finance Minister Pranab Mukherjee on Monday presented a $204-billion
annual budget with more funds for welfare schemes and infrastructure,
along with a declared “vision” to reach the fruits of progress to each
of the country’s 1.17 billion people.
Acknowledging the rising expectations of a restless, young population
that played a significant role in voting Prime Minister Manmohan
Singh’s government back to power, Mukherjee also promised new
incentives for farmers and a big hike in funding for projects focusing
on rural reconstruction, employment, urban renewal, education, health
and other areas of social uplift.
He also sought to put more money in the hands of the average citizen
by hiking the income tax exemption limit, while assuring a law soon
that will address food security in the country by providing 25 kg of
rice or wheat per month to the poor at a subsidised price of Rs.3 per
kg.
Dressed in a spotless white bandgala suit, the 73-year-old politician
said the new United Progressive Alliance (UPA) government will
continue to push its agenda of “inclusive growth and equitable
development” while meeting the “rising expectations of a young India”.
In his typical no-nonsense style, Mukherjee - who had presented his
last budget for the Indira Gandhi government 25 years ago - also
resisted the temptation of peppering his 100-minute speech, broadcast
live, with exemplary quotes like many of his predecessors, restricting
himself to two couplets from Kautilya, the famous political strategist
of Alexander’s era, and Mahatma Gandhi.
“The government recognises the challenges this task entails,” said the
finance minister, referring to the roadmap ahead of the new government
in countering the slowing down of India’s growth to 6.7 percent in the
past year from over 9 percent in the preceding three.
“The first challenge is to bring back the GDP (gross domestic product)
growth rate to 9 percent per annum,” he said, setting the tone of his
fourth career budget watched by Manmohan Singh and UPA chairperson
Sonia Gandhi.
The other challenges, he said, included better governance and ensuring
that the fruits of development reached across regions to touch the
lives of every citizen - the “aam admi“, the current catchphrase
denoting the common man.
as there would be solutions.” Mukherjee said.
bademiyansubhanallah
The stock markets might not have had specific reasons to be enthused
about the budget. But their hyper-reaction is both inexplicable and
unwarranted. On Monday the Sensex fell by a record 869 points, the
biggest fall on any budget day; and the Nifty by 259 points. The over-
the-top negative reaction is attributed to two sets of factors. First,
the budget’s failure to announce any ‘big bang’ reform belied great
expectations. Secondly, there has been disappo intment over certain
key aspects of the budget, notably a higher fiscal deficit number and
a sluggish rate of growth of tax revenues. Days before the budget was
presented, there was intense speculation on whether the government
would use the exercise to kick-start the public sector disinvestment
programme and provide wider space for foreign direct investment (FDI).
To a large extent, the Economic Survey fuelled expectations to
unrealistic levels. For instance, it set an annual target of Rs.25,000
crore for disinvestment. Largely ignored were subsequent
clarifications that statements such as those were advisory in nature.
Economic reforms such as the disinvestment programme have been
controversial politically and the first United Progressive Alliance
government was forced to go slow. What is now clear is that pushing
through reforms of this genre will not be a garden party.
The budget need not be the occasion to announce broader public
policies. Indeed the budget exercise is strictly a statement of
government expenses and income. Over the years, however, successive
Finance Ministers have used it as a forum for interfacing with the
markets and the public at large. It would have helped had the
government conditioned pre-budget expectations by emphasising the
central theme, inclusive growth. There is no doubt that the
considerably enhanced allocations for the social sector have strained
government finances but the 6.8 per cent fiscal deficit could have
been placed in a proper perspective. The Finance Minister has
committed the government to fiscal consolidation from next year and
the introduction of the Goods and Services Tax from April 1, 2010.
There have also been several positive features such as the withdrawal
of the surcharge on income tax and the abolition of the fringe benefit
tax. Tuesday’s rally suggests the stock markets might be discovering
the virtues of the budget slowly. Monday’s lesson: don’t judge a
budget or any set of public policies by the market reaction.
Sid Harth
Jangipur (West Bengal): Union Finance Minister Pranab Mukherjee on
Sunday dispelled fears about the high fiscal deficit projected in the
budget, saying the Reserve Bank of India would be able to manage the
government borrowing programmes effectively.
Speaking at a State Bank of India function here, Mr. Mukherjee said he
had a meeting with the RBI Board of Governors on Saturday.
“I hope the RBI would be able to manage debt effectively as it had
done in the last fiscal,” the Finance Minister said.
In 2008-09, the government borrowings were pegged at Rs. 1 lakh crore.
But because of the slowdown, total government borrowings had risen to
Rs. 3 lakh crore, Mr. Mukherjee said.
In such a situation, the RBI had been able to manage debt effectively,
the Minister pointed out.
To a query, he said there would be no crowding-out effect of private
investments and interest rates would not rise.
The Minister inaugurated 154 branches and 2,151 ATMs of the SBI in the
country.
SBI Chairman O.P. Bhatt said that last year the bank was able to
provide services to 53,000 unbanked villages and blocks through
business correspondence all over the country. This year it would
similarly reach out to 50,000 such areas.
“This is the first time in the banking history of the world that so
many branches and ATMs have been opened on a single day,” he claimed.
— PTI