Chat transcript of the Budget expert Dr M.Thenmozhi held on July 07, 2009.
Dr M.Thenmozhi is a Professor in Finance and Strategy in the Department of Management Studies, Indian Institute of Technology Madras.
She is a recipient of Erasmus Mundus Scholarship for the year 2009-2010 from European Union and Executive Endeavour Fellowship Award from the Australian Government in 2007. She has received a National Award from the former Prime Minister Atal Bihari Vajpayee.
She specialises in finance and her areas of interest are corporate finance and strategy, corporate valuation, financial markets, computational finance, forecasting and time series modeling, stock and commodity derivatives.
What is the outlay in the budget for strategic initiatives (that are meant to make India an economic super-power)?
The main focus of the budget has been on rural development but it has to be supplemented with more financial sector reforms and promote corporate sector activities to make India an economic super power.
Madam, do you think there are still chances of the government selling some stake in PSU bank or oil majors?
No.
How Sonia Gandhi & CM select Pranab Mukherjee as a FM. Is he capable to handle finance. 2009 budget is very bad. This budget is not for general public budget.
The budget may not have been as expected, but i think Pranab will try to come up with further schemes to make up for the mistakes/omissions.
Is this budget is favourable Budget for general public. If yes how? Because public were not happy FM,s budget.
Though the focus has been on the rural sector, most of the schemes may not have full effect on the public.
BSE Sensex tanked 869.65 points to 140453.40 or by whopping 5.83% on a single Budget day of July 6, 2009. how will markets react further?
The effect will be there for about a week and then the market will revive.
What are the main sources of market disappointment in the budget yesterday?
Lack of focus on Financial sector reforms, lack of schemes to attract savings towards developmental activities, schemes to promote corporate sector activities and very minimal concessions to salaried class.
What are the measures to encourage private investment in infrastructure or the manufacturing sector.?
The budget could have focused more on attracting private investments towards infrastructure and Manufacturing sector.
The budget has introduced service tax on transportation of goods by rail, will this affect the transportation cost for the cement industry?
Yes.
Request for lower import duty on inputs and fuels for captive power plants and reduction of service tax was also denied, is this bad for the pesticide industry?
Yes.
The budget proposes to levy basic customs duty of 5% on Set-Top Boxes, would this be negative for cable and DTH operators?
Initially it may lead to slow down of sales for the cable and DTH operators.
Will corporate taxes rise? how will this impact?
Corporate taxes will not rise.
Will the focus on rural sector in the budget -- like increase in agriculture credit flow, helf the FMCG sector reach to these places?
Yes, to some extent.
The budget proposes to abolish FBT, how will the IT sector welcome this?
IT sector will be very happy, because they offer the maximum fringe benefits to employees.
In the Budget speech, FM announced to aim 9% GDP. Is it really possible in global economic crisis?
Yes, it is possible if the schemes are implemented effectively.
What is MAT and how it will affect me?
It is Minimum Alternate Tax, applicable only to corporates.
Is it true that In a way, the biggest (maximum) and the largest (covering more people) beneficiary of the Union Budget 2009-10 is the salaried class?
No. The tax exemption limit has been increased by a small value, and it may not have much impact.
Is the removal of Fringe Benefit Tax (FBT) is a major positive for corporate India?
Yes, it may encourage corporates to offer more fringe benefits to employees.
What impact will this budget have on the fii`s ? will we see nifty inching upwards as all the negatives of the budget has been factored ?
We need to wait and watch.
Is This Technical Correction named as Budget or genuniely Budget is BAD?
The budget did not meet the expectations of the common man and the investors and hence the reaction of the sensex.
Is this budget ideal, as does not have direct agriculture-related measures unlike last year?
More schemes to develop agricultural industry could have been considered.
Do you believe the very fact that the Budget outlay has been increased by over 30% means there will be a lot of spending to encourage growth?
The budget outlay is more towards rural development and the growth may not be balanced across all sectors.
Will extension of loan-waiver will increase liquidity that may fuel demand for consumer goods in rural India?
The loan waiver is a very small percentage, and it maybe difficult to see any change in the liquidity.
Which sector will benefit most from this budget?
Rural Sector.
What does this budget have for the corporate employees? Back to perquisites tax from FBT, will we have to pay more now?
The budget has raised the tax exemption limits and interest rate paid on educational loan is also exempted from Tax. FBT will not lead to payment by employees.
Is this year budget helpful to the weaker section of people in India especially, Tamil Nadu?
Yes, The minimum daily wages will be helpful to the weaker section if implemented properly.
Has Pranab missed out an opportunity to go ahead with reforms?
Yes, very firmly. being the 1st budget they could have come up with better reforms for corporate sector and financial sectors.
Tell us about the Budget impact on the derivatives market?
There is no security transaction cost on investments/trading in derivatives by national pension funds.
Is the Indian economy insulated against global slowdown?
Global slowdown has not affected the Indian economy much because of our better financial system.
It has been seen for quite some time that our Govt. is not considering the Physically challenged . Atleast, PH should be given more exemption Under Sec.80U or for them savings limit be enhanced to Rs.1,50,000/-. please forward your comments
Yes, special exemptions could have been given to PH similar to senior citizens
The sensex crashed within 5 minutes of the Pranab Mukherjee starting his budget speech. So is this wrong time to invest?
One can invest for long term purposes.
What direction should India take to emerge a strong player, especially against an already weakening dollar?
The budget should have focused more on financial sector reforms for this to happen
On a scale of one to 10, how do you rate Budget, 2009!!
6
Should the tax limit be hiked?
Yes, it should have been hiked. with the 6 PC, i think the limit could have been much higher.
Will we have more money in our pocket post-Budget?
For the common man the budget has not provided avenues for savings, most of the funds are allocated for spending
What must have Pranab done to enthuse the stock markets?
He should have come up with more schemes to promote the corporate sector activities
Has the education sector been left out in the Budget?
Higher education sector has been provided additional funds.
