Wednesday, February 28, 2007

India Budget 2007: Playing It Safe

This is my fourth post in three days on India's Budget 2007. I started with a review of the last years budget, postulated my own "anal"-ysis on budget & cricket the next day and gave a running commentary as it unfolded today.

So it is befitting that I run the victory lap for myself (I'm so proud of my achievements/learning a new thing). I mean I have the right to review the budget too! :)

Tomorrow's paper will be full of reviews by learned and not so learned people. Political parties prepare well in advance. They have a review template much before the budget and they could have easily reviewed the whole thing yesterday or the day before!

But seriously, here's what I could make out after putting my brain/kidney into some storm.

  • The fiscal deficit has been pegged at 3.3% from 3.8% last year even though the projected expenditure has been raised from Rs 5.63 lac crore to Rs 6.82 lac crore. This means that revenues will grow by a bigger margin without taxing the common man.
  • I also applaud the E-Governance allocation growth from Rs.395 to Rs.719 crore.
  • Tax rates have largely been left alone even though there is duty rate reduction from 12.5% to 10%. FM is playing it safe for sure.
  • The dampner was ofcourse Dividend distribution tax being raised from 12.5 to 15 per cent and ESOPs being brought under FBT.
  • I stand vindicated for my feeling that Agriculture will be a thrust area in the Budget. There are a lot of incentives and schemes announced for the sector.
  • But I did not see any out of box thinking to manage inflation and also some vision to bring about the desired change in the Infrastructure woes of the country.
  • I expected some visionary thinking on the part of our honourable FM and PM and was disappointed. The budget was just another budget.

Ofcourse it is easier said than done. I feel that the Government has a limited role in building the economy. The real builders are the people of the country. I think it's time to excite and educate the youth of the country to think creatively and build on the vast opportunities available. Time to take responsibility instead of cribbing on the Government's inefficiency and inabilities.

Entrepreneurship is one area where the FM and the PM can work to create an encouraging atmosphere. There is an Entrepreneurship Week being celebrated. Entrepreneurship Week India is being run concurrently with Entrepreneurship Week US that has been sanctioned by the US House of Representatives, and initiated by the Kauffman Foundation, the New York Times and Inc. magazine.

Could there be a political will supporting the climate for entrepreneurship in India?

Investing Gyan
Reviews, Tips, Calculators with an Indian perspective.

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