BUDGET TRIVIA

RUN UP TO THE BUDGET 2004-05

On November 26, 1947, RK Shanmukham Chetty presented the first Budget of Independent India. But actually it was a review of the economy and no new taxes were proposed as the Budget day for 1948-49 was just 95 days away.

Chetty elaborated that the Budget for April 1946 to March 1947 was adopted by the then interim government in March 1946.

But the Budget was for undivided India and as the Budget for 1947-48, passed by the legislature, had ceased to be operative with the division of the country, it was felt that it would be in accordance with the public wish if a Budget be placed before the representatives of the people at the earliest possible moment.

In Chetty's Budget speech for 1948-49, there was a mention of 'interim Budget' and from then onwards, an interim Budget began to mean a Budget for a short period.

BULL DOSE

The industry expects overall stability of policies as well as special focus on enhanced investor education through targeted schemes to ensure the long-term healthy evolution of the market.

The Budget must maintain the favourable taxation policies, which in the past, have provided an optimal environment for investment in equities/mutual funds.

It should ensure continued growth in GDP, through clear policies on maintaining low interest rates and a positive business environment and a good investment climate.

Further, there should be special focus on the pension fund sector and development towards enabling professional fund management in this area.

STATES MEN

After creation of Chhattisgarh, Madhya Pradesh faced financial problems. In our recent talks with the 12th Finance Commission, we tried to convince the panel that the state had a different geographical nature.

We face difficulty in implementing certain projects. Ours is a landlocked state and we face difficulties in comparison to other states that are not landlocked. The commission seemed to be convinced with our problems and we expect that we will get a slight increase in plan allocation in the coming Budget.

We are not expecting a special package, but we want at least 1 per cent increase in plan allocation to Madhya Pradesh. It is 5-6.4 per cent at present. If the Union Finance Minister increases it by only 1 per cent, it will suffice to cater to our needs.

The state has demanded a share in service tax collection and ad valorem duty on coal royalty. We are not much concerned about debt and we are not demanding anything special from the Union government, but we expect the interest on state debt to be converted from higher interest debt to lower interest debt.

The prime minister has recently said that he would lay emphasis on agriculture and power. We expect a little larger share in infrastructure-related packages, since the condition of roads and power is not satisfactory in the state. We also want some sort of incentive since we have a larger forest coverage area in comparison to other states.