Karnataka - Udupi   

`Budget will not encourage savings'

By Our Staff Correspondent

UDUPI, JULY 18. N.A. Charantimath, a Hubli-based chartered accountant, has said that the Union Budget presented by the Finance Minister, P. Chidambaram, will not encourage small savings.

He was giving a talk on "Union Budget 2004" organised by the Udupi unit of the Institute of Chartered Accountants of India (ICAI) and the Rotary Udupi Mid-Town here on Saturday.

Mr. Charantimath said small savings accounted for 24 per cent of India's GDP (gross domestic produce). The Budget had spared only senior citizens, who would get nine per cent interest on their deposits, he added.

He noted that a higher interest rate on deposits would help the country as it would not have to approach other nations for assistance.

The massive increase in the allocation for defence was unjustified, he added.

Mr. Charantimath was of the opinion that when the fiscal deficit was 4.5 per cent of the GDP, ailing public sector units could be done away with by selling them at a premium price.

The small-scale industries sector had got a raw deal, he said. Though the Government's proposal to revive five lakh water bodies all over the country was welcome, it was a subject that came under the ambit of the State governments. Therefore, it would be better if the Centre provided money to the States for taking up desilting work on water bodies, he added. Mr. Charantimath noted that the Government had allotted Rs. 40,000 crore for the power sector. But what was required was a reduction in the transmission and distribution losses. The efficiency of the Central Power Grid should be increased towards this end, he said.

The move to increase the FDI cap from 26 per cent to 49 per cent in the insurance sector, from 40 per cent to 49 per cent in civil aviation, and from 49 per cent to 74 per cent in telecommunications was questionable, he said.

Foreign companies would only help in the flight of capital from the country, he said. It would be better for the Government to encourage Indian companies.

M. Narasimha Kamath, chairman of the ICAI Udupi unit, welcomed the gathering. Devananda, secretary, delivered the introductory remarks. Pramod, president of Rotary Udupi Mid-Town, and Krishnananda Kamath, secretary, were present.

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