New Delhi: All eyes are on Pranab Mukherjee's Budget at the end of the month and expectations are high from the Finance Minister on measure to alleviate pain in the macro economy.
RC Bhargava, Chairman, Maruti Suzuki expects the government to make reduction in subsidies which don’t reach intended targets. Bhargava said, "Inflation is obviously a worrying factor. I think the budget will have to take that into account in deciding on whether they can lower tax rates or spend more in terms of schemes which are in the nature of subsidies. I think they will have to worry more about cutting the fiscal deficit and what I would expect, I am not sure it will happen, whether it is politically feasible for it to happen, is that there would be some deductions in some of subsidies which do not reach the intended beneficiaries and which are lost in the transit process I hope that will happen. I don’t think we can expect much in the way of tax reductions for the similar reasons."
Rakesh Mittal of Bharti Enterprises says the Finance Minister must take the following measure to boost agriculture and help ease inflation. Mittal said, "Lease of agriculture land is one area on long tenure basis which should be allowed. I am again saying this is a state subject, but to my mind the central government should start talking to the states in a serious manner of putting conditionalities of every funding which goes for agriculture until and unless the APMC act is modified and let in, in spirit, until and unless they are making serious changes in the policy. Second for the central government we made a recommendation of average weighted deduction on R&D upto 200% in agriculture for R&D & extension services both.
However, YM Deosthalee and Sanjay Nayyar are looking to Pranab Mukherjee to provide further impetus to the India’s fledgling corporate bond market. Deosthalee, the CFO of L&T said, "We need to take some very bold steps in connection with the deepening of the bond market, debt markets because still there is a huge gap in terms of long term financing. The entire bond market is today dominated by government securities almost 95% of the volume is in government securities. We need to have more & more corporate issuances. So I think what is required is enabling environment. We need more issuers, we need market makers & we need investors.
Nayar, the CEO & Country Head of Kohlberg Kravis Roberts or KKR said, "The fiscal correction needs to happen over time & there are a lot’s of other recommendations made by many reports on diversifying the investor base, making it easier to shelf list debt offerings for those companies that have equity listings. There are some fiscal changes to be made which I think are very easy to do so in the budget. A lot can be done in the budget to make it easier to issue and follow through issuances for both corporate funding as well as infra funding. But if you don’t get the fiscal overhang to reduce, I mean 38% of the banking deposits get preempted through one way or another by the government, I think that’s a big thing.
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