Hope Floats
It’s a good time to hope.December industrial growth was an abysmal 3.4 per cent, the lowest monthly figure in two years! If Sinha is worried, he’s not—for some uncanny reason—showing it yet. To fuel growth and recovery, therefore, the ceos want the budget to focus on three issues: privatisation, infrastructure and exports. Large-scale privatisation, or blanket sale of psus can easily get Rs 30,000 crore. Apart from that, the budget should protect the manufacturing sector and grant excise relief for software and sops for stockmarkets.
As for raising resources, the ceos polled suggest a number of options, moving away from the same old corporate and personal income-tax payers. Says Adi Godrej, MD, Godrej Soaps: "Surcharge on corporate tax and income-tax should be done away with." Venugopal Dhoot, Videocon International chairman, is more hopeful: "In direct taxes, expect a reduction in mat (minimum alternate tax) and waiver of dividend tax." While reduced import duties could be too much to hope for, R.N. Mukhija, senior vice-president, operations, Larsen & Toubro, along with many others, wants the excise duty structure to be revised. When, oh, when will vat (value-added tax) appear, lament the ceos in unison.Some 80 per cent of the ceos polled think that the time has come to introduce farm income-tax (and stop taxing export income). Sixty-one per cent feel that the services tax net will widen, and the vast majority think food and fertiliser subsidies should be cut. And yes, 80 per cent of them feel Indian agriculture is doing okay, no cause for alarm.
Will He, Won’t He?
Clearly, India Inc is sending out an unequivocal message to Sinha this year: spend on infrastructure and privatise psus on a large scale. Some 72 per cent of ceos and analysts want a big disinvestment thrust—most expect it to happen too. And asked what would they spend on most, were they to be in the FM’s shoes, 96 per cent of the ceos plump for infrastructure. But how does one make the government accountable for the much-needed investment in the sector? Over 60 per cent want a commission to discipline the government, on the lines of the Election Commission, while the rest want strong action against default.
But our poll had a reality check built in; we asked ceos what they want and also what they expect from the budget. The differences between the two are illuminating. Only 17 per cent want services to be taxed but 61 per cent believe they will be! And while 67 per cent want tax holidays for infrastructure projects, a significantly lower 39 per cent expect that that will happen. One gets the feeling that if a word association test was conducted for Indian ceos, and you said the word: "Sinha", the ceo would immediately reply, perhaps with a start: "Taxes!"