Economy Feb 21, 2013
Finance Minister P Chidambaram is known as a market reformer, with his investor and business friendly policies. Today's Firstpost Budget Live Debate focused on what this Budget will have in store for India Inc and the rising middle class.
Firstpost spoke to senior journalists including Senthil Chengalvarayan, President & Editorial Director of TV18, Sourav Majumdar, Editor-in-Chief of Entrepreneur India magazine and Siddharth Zarabi, Editor-Economic Policy at CNBC TV18.
While the government has been doing everything in its capacity to cap the widening fiscal deficit with the divestment plan and the spectrum auctions, to stave off a credit rating downgrade, it is imperative that business sentiment is given a boost and investor confidence is restored.
According to panelist Sourav Majumdar, there is surprisingly a lot of optimism from India Inc around the budget because the FM managed expectations rather well by laying the cards on the table and painting a very realistic picture. Businesses, Majumdar noted, are aware of the government's limitations and know that the FM will give it his best shot.
Corporate India, however, does expect this budget to wean people away from gold into other financial instruments of equity and debt. Majumdar mainted that although it will be a tightrope walk, it will be a big picture budget.
Siddharth Zarabi said that the budget is likely to be an election speech with a lot of social sector announcements in the offing. That said, over the past few months,the focus has shifted to get investment bottlenecks out of the way. With regard to catering to the aspiring middle class, Zarabi said that he expects some tweaking of the Rajiv Gandhi Equity Scheme as the 3-year lock-in has proved to be a major disincentive for a middle-class investor. He also said that some rebates to the retiring class of citizens will help prop up India's savings rate.
Senthil Chengalvarayan noted that if the credit rating improves, it will be easier for the companies to raise money- which is the main priority to improve business sentiment because confidence is at a new low since companies are not committing to new projects and funded projects are getting stalled.
He said that given a choice, there is a possibility that FM will tax the super rich but there are no doubts that this will be a big-reform budget. FM will address middle class concerns, given that elections are around the corner.
The panelists were also hopeful that the FM will provide a roadmap not just got GST but also taxation of retrospective deals to lure foreign investors back into India.
Watch the entire video to understand what this budget will offer India Inc.
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