The Hindu : Business : Budget a non-event, says Yashwant Sinha

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Saturday, Mar 04, 2006

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Business

Budget a non-event, says Yashwant Sinha

Staff Reporter

`Chidambaram has not unveiled any strategy in the budget'

KOCHI: Former Finance Minister Yashwant Sinha has said that Indian economy is on a glide path of its own irrespective of the impact of the annual budgeting exercise.

He was analysing the Union Budget at a function organised jointly by the Kerala Management Association and the Cochin Chamber of Commerce here on Thursday.

Mr. Sinha termed the budget as a non-event and said it will be business as usual despite its implications. But he cautioned against taxation of items of the Finance Minister's choice. This is a very bad practice, he said, pointing out the selected list for inclusion and exclusion of items for imposing duty.

Mr. Sinha said Finance Minister P. Chidambaram has not unveiled any strategy in the budget. He criticised the imposition of tax on ATMs, asking how can withdrawal of one's own money be taxed. The clause imposed on charitable societies to identify the source of contribution also came under his attack. Infrastructure development has been given a raw deal in the budget. It is a major area of concern, he said. The former Finance Minister found fault with the treatment meted out to the housing sector. The country needs new initiatives in the housing sector as well as highways, he said.

Mr. Sinha pointed out that the index of industrial production has reduced according to the financial survey. He wondered whether it is a sign of deceleration. The revenue deficit remains a matter of concern, he said.

Touching upon inflation, he said one has to continue to worry about it. Petroleum companies are bearing a big burden and it could be passed on to the consumer in future. Then, inflation will go up, he said.

Labour reforms are not being talked of now. But he admitted that reforms in the economy have always been a tough task. Coupled with this, the present Finance Minister is under pressure from the coalition set-up. Nevertheless, the budget has become an exercise not much to be afraid of as it is going on expected lines. The trend could change in future, Mr. Sinha said.

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