The Finance Bill, or the Union Budget as we popularly know it, is one of corporate India’s most awaited annual events. Each year after the budget is announced, it triggers widespread debate amongst the masses and the intelligentsia alike. This year after the resounding re-election of the UPA government, the entire nation was looking up in anticipation as to what the budget would hold for us.
A week after the budget was announced, SIBM (Symbiosis Institute of Business Management) Bangalore took the initiative to decipher the true meaning of the budget for the common man and what it meant for its current batch of students who would be going on to leadership positions in corporate India in the years to come. SIBM Bangalore invited eminent personalities from the corporate world and academia, in an interactive panel discussion to share their invaluable insights on Budget 2009 and its implications on our economy.
The panelists at the event included P R Suresh (Secretary of Southern India Regional Council of the Institute of Chartered Accountants of India), Dr. Abdul Aziz (Visiting Professor at Institute of Social and Economic Change. Consultant to organizations like World Bank, HIVOS, DFID and SIDF. Member of Government of Karnataka in State Finance Co-operation and State Planning Board), Brahmananda Pani (CA, CS, DGM – Finance, Bharat Earth Movers Limited), Dinesh Agarwal (Member of ICAI), Lionel Aranha (Member of ICAI, Solicitor and Faculty of Financial Management at IIMs and leading B-schools), Arun Vishnukumar (Research Analyst, Reserve Bank of India), Prof. Padmalata Suresh (Author of several leading books on Banking and Finance, Faculty of Finance in IIMs and several leading B-schools), Prof. Pankaj Gupta ((Director – SIBM Bangalore, Fellow – ICWAI, Fulbright Scholar, ex-faculty at IMT Ghaziabad and IIM-K)
Snippets from the event
The panel discussion proceeded in three Sessions. Session one started with initial reactions of the panelists to the Budget, session two dealt with technical aspects of the budget while Session three revolved around direct and indirect taxation policies and its implications. Mr. Dinesh Agarwal moderated the lively proceedings.
The panel was unanimous in its verdict that this year’s populist budget fell short of expectations on many fronts. Mr. Aranha added that the content heavy budget primarily focuses to stimulate internal consumption and trigger cash flow back into the system. He however stated that policies that look good on paper do not necessarily translate into implementation and the government needs to monitor the process strongly.
Prof. Suresh opined that this budget has done precious little to compensate for the shortcomings of the previous budget and allotted funds for infrastructure is pessimistic in comparison to similar allocations by other countries. Vishnukumar brought in the banker’s perspective adding the importance of rural development to promote cash flow into the banking system and promote credit growth. Abdul Aziz sounded a word of caution stating that the dangerous fiscal deficit levels could lead to a price inflation that would adversely affect the same weaker sections of the society who are now being rescued by the inclusive growth policy.
P R Suresh however gave a thumbs up to the project stating that it was absolutely warranted adding that a project GDP growth rate of 6% is a sign of a good economy when the global contraction rate is at 3%. He however added that the fiscal deficit is misrepresented as it doesn’t account for oil bonds, increase in wages as per the 6th Pay Commision and the fertilizer subsidies. He gave an overall 6/10 rating to the budget that was bettered by Brahmanand Pani who gave it a 7 for its pro-populist policies and the scrapping of the FBT.
The panel was however united in voicing their concern for lack of stimulus to Primary Education and Power Generation, as there are issues of serious concern for the economy and growth.