Union Budget 2011: Precursor of many changes, including DTC, GST
Moneylife Digital Team 01 March 2011

In a panel discussion on the Union Budget, organised by Moneylife Foundation at Mumbai, prominent speakers felt that this year’s Budget is a precursor of many changes that would take place from April 2012 onwards

The Union Budget 2011 has some good features, but on overall analysis it appears to have done more lip service than anything specific to tighten the country's loose governance systems, improve economic competitiveness, or hold out hope of effectively tapping its anticipated demographic dividend. This was the overall sentiment expressed by speakers at a Budget Discussion hosted by Moneylife Foundation in Mumbai on Tuesday.

Ameet Patel, chartered accountant and tax partner at SKP Group said, "The Union Budget 2011, is dry and has very less tax proposals as the government is trying to pave the way for the Direct Tax Code (DTC), which will determine taxation issues for the next 40-50 years, and the Goods and Services Tax (GST)."

He pointed out that the thrust of the Budget was undoubtedly on the infrastructure sector, which accounts for 48.5% of the planned expenditure. On the growth front, the finance minister (FM) expects the economy to grow at 9% in the next fiscal and he did not dare to completely roll back the fiscal stimulus announced in 2008. The rates of service tax and excise duty have remained intact, Mr Patel said. "Another reason not to change the tax rates was the comfortable position of fiscal deficit, mainly due to revenue collections from auctioning of 3G spectrum."

Speaking on the impact of the Budget on the stock markets, leading investment expert and prominent market analyst, Gul Tekchandani, said, "I think, for the Nifty the bottom would be 5,000 and by the year-end it may go up to 6,000 levels." Mr Tekchandani also shared his experiences on the global markets, the persistent inflation threat across the world and its possible effect on Indian markets.

The FM has allowed foreign investors to invest in SEBI-registered mutual funds after fulfilling Know Your Customer (KYC) requirements. However, Debashis Basu, editor and publisher, Moneylife, cited various studies by many institutions over the years, and said, "Although foreign investment is a good thing, many investors are home biased when it comes to investment." For example, he said, people tend to invest only in their home country, rather than invest in a country that they know little about where they may earn more.

 The panellists analysed, debated several aspects of the Budget, and presented a detailed analysis of the implications of the proposals for the common man and corporates. There was an interesting and enlightening exchange of opinions between the panellists and the participants.

Earlier, Sucheta Dalal, managing editor, Moneylife, and founder trustee of Moneylife Foundation, introduced the panellists.

Comments
Human Resources Training
1 decade ago
How will the new Pension Tax Changes in 2011 affect you? If you are a high earner then you may be affected more than others.
HFS ENGINEER
1 decade ago
The FM has allowed foreign investors to invest in SEBI-registered mutual funds after fulfilling KYC requirements (not yet announced. Hope these are stringent & permitting genuine bonafide frgn investors only). Would the sudden mass exit of frgn Investors adversely affect the NAV of the underlying MF's Scheme & consequently the genuine Indian investors (as has been the case of hit in SENSEX when the FII's suddenly pull out massive funds from the Indian bourse)? What safety net (provisions) has the current Budget introduced to safeguard the genuine Indian Investors' interest? Does NGO like MONEYLIFE propose to take up this crucial issue with authorities concerned - before the Budget is passed - to nip the probable damage? Yesterday's Budget talk / discussion was fairly enlightening. Congrats to MONEYLIFE for organizing. Thanks.
Samar Mahapatra
1 decade ago
An educative and interactive debate , informative and erudite package.Techchandani's free wheeling talk pragmatic and encouraging.Budget has much less dose of taxation issues, and first time policy focus on Sr Citizens.
Debasis struck a different note, worth watching.
Array
Free Helpline
Legal Credit
Feedback