Nostalgic Over Budget?

One month down the lane, walking across again!!

PreBudget Spice: YeahYes, I am talking about our own budget of 2012-2013, the one that was released on March 16 and preceded by the Railway Budget and Economic Survey on 14th and 15th March 14 and 15 respectively. I am talking about the same budget that was abuzz off when with Mukul Roy replacing replaced Dinesh Trivedi as Railways Minister by our very own “Didi” on the proposal of fare hikes in railways so that India’s largest public undertaking could make net 4k crores every year. The idea was not much appreciated by Mamta Banarjee and she pulled the chain as when Trivedi jumped the signal of and doing did something, which has had not been done for years in the garb of protecting the poor to be keep under the covers of “the party of the poors”. And tThe government at the centre did nothing other than to request Mamta to keep calmcool and let theallow the mega event of the Budget 2012-2013 to move go oncomplete smoothly. and tTo the public and the media it they said “It’s Coalition Politics-you know”!

Well, this is the day for which, the people and the country wait, so that they for whole of the year to can see some light of hope at the end of the tunnel. The country, which is supposedly is in the race of making it to the list of most developed nations of the world and whose presence should be felt at the realm of affairs that and occupiesy centre stage in the world is still struggling with the number crunching or rather should I say manipulating numbers. There are many expectations out of the budget and many recommendations that are made to the Mr.the fFinance mMinister to come up with provide a logical and a sound budget. After all, the budget doesn’t only means correction of prices of certain commodities, giving subsidies to some, and telling stating the expected growth rate of the country’s economy. It is much beyond that. It is also supposed to cater to the factors that come into the picture while finalising on the digits, how can the budget be put into use effectively, the sectors that need attention and funds both, cover the subjects of contention such as Direct Taxes Code (DTC), Goods and Services Tax (GST), etc. We all agree with the fact that politics can’t be left aside but politics can’t be the sole criterion for the same.

What should our budget do?

By now you would have already started estimating your expenses for this financial year and the amount that should go into your the savings, . let Let us have take a recap of what are the various factors in the Indian economy are that garner attention while you are touching the finishing line of budget. Are we making disposable money available to the lower income group? Are we moving towards an inclusive growth pattern? Will this budget bring financial consolidation? Will this budget encourage investments; both domestic and foreign? Is the budget being rational enough in catering to the needs of all levels of the pyramid? I know, we can’t have all dishes set on a platter but we can have selected ones that satiate us the most. The fight remains that the end product should lead to fiscal stability strengthening certainty amongst masses, be it a government employee or a businessman.

Economies like that of India need to be particular about their weak points, areas of special attention. There are many questions that most of the budgets go do not unanswered.. Our social indicators such as health and education are not improvising improving fast enough and we are still not giving investing too much money to in them. Alloted budgetssMoney is are not sufficient enough to meet all demands, so, how can it bring positivebright end results. We are not among the fast building infrastructure countries, not even in urban cities let alone in rural areas. We definitely need more investment but there is no lucrative offer that attracts investments.

The Wish List:

Though the budget comes with its own +spros and –scons, yet everyone is still always keen to be benefitted from the big number game. From the ‘aam aadmi’ to top notch ‘business magnates’ each one of them wants some cookies to be delivered on their plate. Relief from price rise, higher income tax exemptions, more tax saving options, and more avenues for jobs is what everyone wants, especially the lower section of society who is greatly benefitted by such reforms. In This this budget, industries wanted the custom and excise duties to be untouched, increase depreciation on plants and machinery, remove minimum alternate tax from SEZs. In the wake of a stagnant investment scenario, there was a demand to reintroduce investment allowance and boost investment both from inside and outside the country and introduce policies that help in doing so. Economists were of the view to expedite project clearances, increase excise duty, cut subsidies on fuel, diesel, LPG and clear fiscal consolidation map for the nation to drive ahead on. Probably the economist’s demands were pragmatic in their nature for the country to develop and sustain itself.

What did Budget come out with: The Protocol!

In contrastContradictory, the budget came with no big game changers but just a little few alterations here and there. The budget started with Mr. Finance Minister’s words, that go as follow:

“When one year ago, I rose to present the budget, the challenges were many but there was a sense that the world economy was on mend. The budget was presented on the first glimmer of hope. But reality turned out to be different. The sovereign debt crisis in the Euro zone intensified, political turmoil in the Middle East injected uncertainty, crude oil prices rose, an earthquake struck Japan and the overall gloom refused to lift.”

So probably I can conclude, this explanation was simply an excuse for his team’s he started with the explanation for his (rather say team’s) failure and an excuse forlaid the ground for ‘Please do not to expect much from the this budget’ being presented. Well, let us not confine ourselves to the negatives and shed some light on the positives thingsas well. He warned people about the possibility to face some hard decisions as India has global responsibilities of a kind that it did not have earlier. He intended included aa need to improve macroeconomic growth (I guess, he is quite burdened with micro financing he has done so far) and strengthen domestic growth drivers to sustain high growth. He rightly pointed the need to pace the reforms and supply side management of the economy. I would say here that he struck the right chord on which nobody would have much differences. After all, it is equally important to implement schemes and reforms adequately rather than to just increase increasing the number of such schemes.

Rest is all story….!! (Who all are benefitted, who are at loss remains a mystery because the market cannot be adjudged by some sure short method and there are cases where losses are bound to make losseshappen, companies make profits and vice versa. All the sectors whether automobiles, transport, retail sector, real estate and hospitality, gems and jewellery or power are little benefit a littleted and are at a little loses a little..)

Adjust the budget into your portfolio: The Caution!

Before the results are out, there are always lot many speculations, however once the results are out, it is very important that we focus our attention to on upcoming issues and become wiser. The budget warns us of being cautious and realistic in about our return expectations and be prepared for some volatility. Also, if you have oil and gas stocks, replace them with infrastructure companies. FDI in retail will have political consensus in a few months, however FDI in civil aviation will come soon. (I guess soon meant “really soon” in this case). Much talked about GST will roll out by August 2012. Central subsidies will be brought down to 1.75% of GDP in next three years. And for the first time investors, invest in phases over next three months (one of which is gone).

Karanvir Gupta

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