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Pranab has enough time to showcase his cruelty as Mamata has succeeded to oust the Railway Minister and the crisis is averted.By passsing the Parliament and constitution is nothing new and Pranab opts for the end of the Budget session to Push on the

Pranab has enough time to showcase his cruelty as Mamata has succeeded to oust the Railway Minister and the crisis is averted.By passsing the Parliament and constitution is nothing new and Pranab opts for the end of the Budget session to Push on the Reforms Button! The fate of Oil Companies already sealed and Pranab intends to follow brand new Disinvestment Roadmap!He speaks out very Tough on Oil subsidy only out of the Parliament! Government aims to tap various assets to raise an estimated Rs 1.52 lakh crore (over $ 30 billion) in the next fiscal, nearly half of which could come from telecom spectrum sale and disinvestment in PSUs.The targetted proceeds worth Rs 1,51,717 crore from the government's physical and capital assets would account for more than one-tenth of its total revenue receipts in 2012-13.

Ending days of stalemate with the Trinamool Congress leadership, Dinesh Trivedi on Sunday resigned as railway minister after speaking with party chief mamata Banerjee. TMC leader Mukul Roy to replace Trivedi as railway minister.

Describing rising price of oil a threat to global growth, IMF chief Christine Lagarde called upon emerging economies to "invest in reforms" to attain higher growth.

Indian Holocaust My Father`s Life and Time - Eight HUNDRED SEVENTEEN

Palash Biswas

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Pranab has enough time to showcase his cruelty as Mamata has succeeded to oust the Railway Minister and the crisis is averted.By passsing the Parliament and constitution is nothing new and Pranab opts for the end of the Budget session to Push on the Reforms Button! The fate of Oil Companies already sealed and Pranab intends to follow brand new Disinvestment Roadmap!He speaks out very Tough on Oil subsidy only out of the Parliament! Government aims to tap various assets to raise an estimated Rs 1.52 lakh crore (over $ 30 billion) in the next fiscal, nearly half of which could come from telecom spectrum sale and disinvestment in PSUs.The targetted proceeds worth Rs 1,51,717 crore from the government's physical and capital assets would account for more than one-tenth of its total revenue receipts in 2012-13. This would be much higher than the amount garnered by levying even an increased service tax of 12 per cent during the year.

The government on Saturday said that it was eyeing stake sale in around 10 public sector companies, including BHEL and SAIL, during the next financial year to mop up Rs 30,000 crore from disinvestment.Times of India Reprts.

On the other hand,Ending days of stalemate with the Trinamool Congress leadership, Dinesh Trivedi on Sunday resigned as railway minister after speaking with party chief mamata Banerjee. TMC leader Mukul Roy to replace Trivedi as railway minister.

A source close to Trivedi said he forwarded his resignation to Prime Minister Manmohan Singh.

This follows a talk with Trinamool supremo and West Bengal chief minister Mamata Banerjee earlier Sunday.

Mamata Banerjee told reporters, "Dinesh Trivedi called in. He will resign tonight."

Said Trivedi, "She (Mamata Banerjee) spoke to me. The TMC wants me to resign. I told her I will abide by the party and resign."

Dinesh Trivedi had been insistent till now that he would not quit his post unless he got a written order from Mamata. He said on Sunday that the Railway Ministry could not be treated as somebody's property, although, he added that he had full regards for the Trinamool Congress supremo.

Mamata was reportedly upset with the railway minister over the train fare hikes announced in the Rail Budget. Trivedi had reportedly not consulted the Trinamool Congress over the budget, either.

Rejecting criticism that the Budget was not bold or reformist, Finance Minister Pranab Mukherjee today asked the critics to be "more realistic" to political ground realities.

"I am a bit disappointed," he told PTI in an interview here while answering a question about reactions to the budget he presented two days ago. Acknowledging that the natural expectation would be that "all corrective measures" should have been taken in the budget because it would be difficult to do so in 2013 ahead of elections a year later, the Minister said that the budget was not not just "merely the economic theory of what should be done or what should not not be done".

"Budget is also a political document in the sense that it requires the approval of Parliament," he emphasised adding, if budgetary proposals do not not receive approval of coalition partners it becomes difficult to implement.

Mukherjee pointed out that it was not not possible to consult allies before the budget because the proposals were confined Prime Minister and Finance Minister only.

Therefore, wider consultations were possible only after the presentation of the budget and "we shall have to take various stakeholders on board", he said.

Meanwhile, Describing rising price of oil a threat to global growth, IMF chief Christine Lagarde called upon emerging economies to "invest in reforms" to attain higher growth.

"Emerging market economies need to calibrate macroeconomic policies both to guard against further fallout from the advanced economies as well as to keep overheating pressures in check," she said at a meet in BEIJING .

Lagarde, who is scheduled to reach India tomorrow, said that "by continuing to invest in reforms --- such as increasing social transfers or lowering consumption taxes --- they (EMEs) can, over time, translate higher growth into better living standards for all".

She pointed that after years of difficulties in wake of global crisis, the financial-market conditions are more comfortable and recent economic indicators are beginning to look a little more upbeat, including in the US.


At the same time it dismissed suggestions that the sell-off target was exaggerated with a view to help finance minister Pranab Mukherjee show a sharp improvement in the deficit numbers for 2012-13. "We looked at three options of targeting Rs 40,000 crore, over Rs 40,000 crore and Rs 30,000 crore. But we settled for Rs 30,000 crore as we wanted to show that we have a credible target that can be met... The market conditions have improved," Khan told reporters.

For the last two years, the government has been targeting to mop up Rs 40,000 crore through sale of stake in profitable public sector companies but has not achieved the goal. It is expected to close the current financial year with receipts of less than Rs 14,000 crore from stake sale in Power Finance Corporation and ONGC, where shares were sold to institutional investors (largely LIC) through an auction process.

Finance secretary RS Gujral said the government was looking at initial public offers and follow-on issues as the preferred route for raising resources although the cabinet had recently approved buyback of shares and cross-holding public sector companies. Khan said the process for sale is in various stages with cabinet nod already received for companies such as SAIL and Bhel. In case of Hindustan Aeronautics Ltd (HAL) a management restructuring was underway, while MMTC too was undergoing the process of appointment of directors to comply with Sebi requirement.

The disinvestment secretary said that companies such as Neyveli Lignite, where stake sale was put on hold during UPA I following protests by DMK, the government stake had to come down to meet the listing requirements of at least 10% public holding. Even MMTC was in the same situation.

However, Economists at rating agencies and fund houses have described the 5.1 per cent fiscal deficit target for the next fiscal as an uphill task considering the absence of a clear fiscal roadmap and the still uncertain global environment.

"We do expect some fiscal slippages relative to the Budget target, with the final figure possibly slipping to around 5.3-.5.5 per cent of GDP," said HSBC chief economist for India Leif Eskesen, though he described the Budget as "more realistic, and low on ambition".

Eskesen said fiscal slippages are likely to come from non-tax revenues and subsidy fronts. Increasing indirect taxes, divestment target and spectrum receipts and cutting subsidies will not be sufficient, he added.

Global rating agency Standard & Poor's also said the uncertainty regarding policy implementation will keep the deficit high next fiscal.

"While the Finance Minister announced various fiscal reforms, the timing of the implementation of key reform measures such as GST, DTC, and targeted direct subsidy remains uncertain. Also, deficit is likely to remain high, as uncertainty surrounds the path to subsidy consolidation and to lowering the fiscal vulnerability to volatile commodity prices," it said.

It further said that the nominal GDP growth will exceed the ratio of government deficit to GDP next fiscal. "We expect debt-to-GDP ratio to fall to 74.7 percent in FY 2013, from 74.9 percent in FY2012. But large public funding programmes, with new market borrowing of Rs 4.8 trillion, will put some pressure on financial markets, adversely affecting recovery.

"With the 2014 general elections, we believe the chances of achieving a deficit target of 3 percent for fiscals 2014 and 2015 seem remote," S&P said.

Citi India economist Rohini Malkani said the Budget is safe economically as well as politically, but lacks on the reform front that the market has been hoping for.

"We see slippages on revenue and expenditure fronts. The revenue numbers are dependent on growth sustaining and the markets holding up. On the expenditure front, the slippage may stem from fuel subsidies," Malkani said. The bottom line is "FY 2013 deficit being missed by over 40 bps, to 5.5 percent".

Care Ratings managing director D R Dogra said achieving 5.1 percent fiscal deficit target will be tough, given the tepid growth in the country as well outside.

Moreover, he said, the Budget has not exactly put a leash on expenditure but has tried to rationalise subsidies on fertilizers and oil, though one needs to see if they do work out at the end of the day.

They also said the deficit target will most likely overshoot by 20-40 bps to 5.3-5.5 per cent as the projected revenue increase and subsidy cuts may not materialise.

As per the budget estimates for the fiscal 2012-13, the government is looking to raise Rs 30,000 crore through part-sale of its stake in various public sector companies. Additionally, over Rs 27,000 crore is expected to come through dividend payments from PSUs.

It is also expecting nearly Rs 23,000 crore in form of dividend from RBI and various nationalised banks and financial institutions, taking its total dividend estimate for 2012-13 to over Rs 50,000 crore.

Besides, the government is looking at total proceeds of over Rs 58,000 crore from its various telecom assets, including Rs 40,000 crore from sale of spectrum next year.

From its energy assets also, the government is targetting funds worth over Rs 13,300 crore, most of which would come in form of royalty on offshore petroleaum assets.

In its budget for 2012-13, the government has estimated total receipts of nearly Rs 14.9 lakh crore, out of which about Rs 7.7 lakh crore would come from tax revenues, close to Rs 1.64 lakh crore from non-tax revenues and about Rs 5.55 lakh crore as capital receipts.

The disinvestment proceeds are part of capital receipts, while gains from spectrum sale and other asset-related revenue realisation are part of non-tax revenues.

The projected tax revenues include about Rs 3.73 lakh crore as corporate tax, Rs 1.95 lakh crore as income tax and Rs 1.24 lakh crore service taxes, among others. In this year's budget, the government has proposed to hike the service tax from 10 per cent to 12 per cent.

For the current fiscal ending this month, the government had estimated non-tax revenue worth Rs 13,000 crore and Rs 1,600 crore from auction of telecommunication spectrum and FM phase III, respectively.

While these auctions did not materialise this year, the government managed higher-than-estimated receipts in form of dividend from PSUs.

In addition to Rs 40,000 crore from spectrum sale next year, the government is targetting more than Rs 18,200 crore of revenue from other communication services as well in 2012-13.

India's Finance Minister Pranab Mukherjee on Sunday defended the government's "zero-risk" budget, conceding he was in a tight political spot and could ill afford bold economic reforms.He steered clear of controversial steps to further pry open India's economy to foreign investors in last Friday's budget and fixed a higher-than-expected fiscal deficit target that avoided tough public spending cuts.When the finance minister outlined his objectives of the budget in his first part of the speech, it looked like he was going to bite the bullet, TV Reports described thus the Helpless FM.  

Finance Minister Pranab Mukherjee today said the government will take "corrective decision" in consultation with all stakeholders to deal with the impact of rising crude oil prices on public finances and subsidy bill.

"The important question is can a country afford to import 100-120 million tonnes of crude if the prices (don't come) down to a reasonable level. That very question is looming large, staring at our face and we shall have to collectively address this issues," he said replying to queries related to fiscal deficit and fuel subsidy by industry leaders here.

Crude oil prices have been rising due to geo-political reasons, including the Iran situation. The prices had touched a high of USD 125 a barrel earlier this month.

"There are various suggestions, we are working on it. We shall have to address these issues ...I would like to involve all the stakeholders, bring them on broad to take the corrective decision," he added.

The government has refrained from increasing prices of diesel, kerosene and cooking gas despite global crude oil prices witnessing a sharp rise.

Petrol prices were de-regulated in 2010 but the government is yet to take a decision on freeing diesel prices.

High subsidies are putting pressure on the country's fiscal deficit, which is likely to touch 5.9 per cent of the GDP this fiscal and 5.1 per cent in 2012-13.

The government targets to bring down the subsidy bill to below 2 per cent of GDP in the next fiscal and 1.75 per cent in the subsequent years. Government has made a provision of Rs 40,000 crore towards fuel subsidy


"I could have introduced measures that would have left everybody clapping -- but the clapping would have been short-lived," the veteran 77-year-old politician told business leaders at a post-budget forum in New Delhi.

"I had to be extra careful."

A string of graft scandals and recent bruising state election losses have put the Congress government on the back foot in parliament and frayed its relations with allies, observers say.

"I had to keep in mind conditions on the ground... that the budget would have to be approved by parliament," added Mukherjee, known as the government's trouble-shooter.
Mukherjee presented the budget against a backdrop of political infighting over a proposed rail fare hike to upgrade the notoriously unsafe network that has underscored the increasingly fragile nature of the ruling coalition.

The budget forecast economic growth for the fiscal year to March 2013 of 7.6 percent, a rise from the 6.9 percent projected for this year, but far below the eight-to nine-percent levels the economy grew at for much of the last decade.

It set a fiscal deficit target of 5.1 percent of gross domestic product (GDP) -- less than the projected 5.9 percent this year -- but still the widest among major emerging market nations.

The budget has come in for the harshest criticism of on any to be presented by the government of Prime Minister Manmohan Singh since it first took office in 2004.
Industry leaders said Mukherjee failed to seize his last opportunity to get the economy back on track before what is expected to be a "please-all budget" next year ahead of 2014 elections.

"What may be good in the short run may be bad in the long run," said R.V. Kanoria, president of the Federation of Indian Chambers of Commerce and Industry.
India's media has also attacked the budget with the Mail Today calling it a "zero risk budget". Economists have been equally harsh with one describing it as a disappointing exercise from "a near-toothless government".

Industry leaders said service and excise tax rises could fan already stubborn inflation, delay interest rate cuts needed to trigger a new investment wave and slow growth further.

Industry leaders also slammed the government over a proposed change to allow it to retroactively tax capital gains by foreign investors.

"Retrospective amendments of laws do little for confidence building both among foreign and domestic investors," said Kanoria.
But Finance Secretary R.S. Gujral rejected suggestions the move would deter investors.

"Foreign direct investment comes when there are profits to be made... not just where taxes are the lowest," he said.

The government is expecting lower interest rates in the coming months as it looks at policy reversal by the Reserve Bank in the wake of moderation in inflation.

"... the fact that core inflation has moderated in the past three months and that in coming months we are looking at reversal in the policy rates should help in improving sentiments," Finance Minister Pranab Mukherjee said while addressing the captains of industry in his post-Budget customary briefing.

RBI had raised the short-term lending (repo) rate 13 times between October 2010 and September 2011 in its bid to fight inflation. In all, the repo rate was increased by 3.75 per centage points.

The headline inflation remained high for most part of the year. It was only in December 2011 that it moderated to 8.3 per cent, and then to 6.6 per cent in January 2012, Mukherjee had said in the 2012-13 Budget speech.

Monthly food inflation declined from 20.2 per cent in February 2010, to 9.4 per cent in March 2011 and turned negative in January 2012, he had said.

"Though the February 2012 inflation figure has gone up marginally, I expect the headline inflation to moderate further in the next few months and remain stable thereafter," he had said.

Meanwhile, Department of Financial Services Secretary D K Mittal said, "RBI has reduced CRR by 1.25 per cent releasing Rs 80,000 crore to banks. The money was not earning any interest from RBI."

In terms of what RBI has done there is strong downward bias on interest rate, Mittal said.

Earlier this month, RBI reduced the cash reserve ratio (CRR)-- the portion of deposits banks require to keep with the central bank -- from 5.5 per cent to 4.75 per cent. With the reduction, the central bank pumped in Rs 48,000 crore in the economy.

RBI reduced the cash reserve ratio (CRR)-- the portion of deposits banks require to keep with the central bank -- from 5.5 per cent to 4.75 per cent.

Outlining higher GDP growth as one of key objectives, the Finance Minister said, the government would ensure that inflation pressure remain at the moderate level of 6-7 per cent in 2012-13.

"Inflationary pressures need to be at a moderate level in the next financial year," Mukherjee said, adding, "I am not talking about a 3-4 per cent inflation level; 6 to 6.5 per cent will be an acceptable level."

Following the hike in excise and customs duties in the Budget for 2012-13, luxury vehicles in are set to become more expensive by up to Rs 3 lakh as auto makers have decided to pass on the additional burden.

Premium vehicle makers, including Mercedes Benz and Audi, have decided to increased the prices of their vehicles and are currently finalising the exact amount of hike, while BMW is evaluating its options.

"We are going to pass on the additional burden to customers. We have not decided the exact amount yet, but on an average it will vary between Rs 2 lakh and Rs 3 lakh," Mercedes Benz India Director (Corporate Affairs and HR) Suhas Kadlaskar said.

The premium car makers usually bring in advanced technology into the country and this step will be very counter productive, he added.

"The Budget is very disappointing for us. We were hoping for some reduction in taxes for large vehicles instead of hiking it further," Kadlaskar said.

Mercedes-Benz India currently manufactures its C, E and S Class luxury sedans in India. The existing prices of these cars vary between Rs 26 lakh and Rs 1.01 crore.

The other models that the comapny sells here through fully imported route are ML-Class, GL-Class, E-Class Coupe, E-Class Cabriolet, R-Class, SLS AMG, AMG-Series and Maybach. As per its website, these vehicles are available between Rs 45.39 lakh and Rs 5.85 crore.

Another luxury car maker Audi India also said it may hike the prices of its products in the country.

"The increase in excise and customs duty on large cars in this budget is very surprising. This increase comes at a time when the Indian automotive industry was finding favour with customers looking for better and efficient cars," Audi India Head Michael Perschke said.

The company may now re-evaluate its pricing strategy in India, he added.

Audi also assembles some its premium models in India. These are sedans A4 and A6, and sports utility vehicle Q5. The prices of these vehicles start from Rs 27.7 lakh.

The company also imports other models such as A7, A8, Q7, RS5 and R8. The prices of these cars start at Rs 55.35 lakh.

Finance Minister Pranab Mukherjee had announced hiking the basic customs duty on imported vehicles valued over USD 40,000 and with engine capacity of over 3,000 cc and 2,500 cc for petrol and diesel driven vehicles respectively to 75 per cent from 60 per cent.

Another luxury car maker BMW, however, said it has not taken a decision on passing on the burden to consumers.

"We have not decided about the price increase yet. We finalise our startegy next week whether we will pass on the additional burden to consumers or not," a BMW India spokesperson said.


Pranab sets stage for GST, sans date
S Madhavan / Mar 19, 2012, 00:26 IST

One of the key expectations from the finance minister's speech last Friday on Budget 2012-13 was regarding the Goods and Service Tax (GST). Most importantly, there was a strong anticipation that the finance minister would forcefully reiterate a date for its introduction, given that the country had missed several earlier deadlines that were set in this regard.

On the first and foremost point of a possible date for the introduction of the GST, alas, the speech was completely silent. This is indeed unfortunate since, while it is recognised that the GST will only come about if there is unanimity and agreement between the Centre and the states, it would nevertheless have occupied peoples' minds if the finance minister had indeed put down a date. In fact, he had done so in earlier Budget speeches, so it is doubly disappointing that he had not done so this year, even though we have evidently made progress in this regard since he last spoke on the matter in Budget 2011-12. Perhaps he has considered the magnitude of the unfinished task ahead and has hence wisely refrained from indicating a date. One would sincerely hope that this prognosis is proved false and that we are indeed able to introduce the GST at least by April 2013.

If one were to go beyond this and look to the positives in the speech regarding the GST, there are several references therein to the various enablers that would facilitate and are indeed essential for the introduction of the GST. These are discussed in detail below.
Evidently, the most important of these is the Constitutional Amendment Bill. The finance minister states that this Bill, which was introduced in Parliament in 2011, is awaiting discussion and debate in the Parliamentary Standing Committee (PSC). The finance minister has thereupon stated that as Parliament awaits the recommendations of the PSC, drafting of the model legislation for both the Central and state GST is under progress. As is well known, the proposed GST is a dual one comprising both the central and the state GST which would apply on all transactions throughout the supply chain.

Beyond the Constitutional Amendment Bill, the single biggest enabler to bring in the GST is the information technology backbone in the form of the GST Network (GSTN). The finance minister informs that the GSTN, which is now approved by the Empowered Committee of State Finance Ministers, will be set up as a National Information Utility and will become operational by August 2012. This is clearly a major milestone. As the finance minister has stated in his speech, the GSTN will implement a common PAN based registration, returns filing and payments processing for all states on a shared platform. He also states that the use of the PAN as a common identifier for both direct and indirect taxes will enhance transparency and check evasion.

Other references to the GST in the speech are regarding the following:



The manner of taxation of services, including the framework of rules that will determine both the place of supply as well as the point of taxation of services.

The need to align the two federal taxes in the form of the central excise and service tax, being the goods and services taxes at the Centre respectively.

On taxation of services, the finance minister has stated that there is a need to widen the tax base and strengthen its enforcement, given that the tax has been in force for a full 18 years. Accordingly, the finance minister has mooted the need to move towards taxation of services based on a negative list. It may be recalled that the negative list basis of taxation was put out for public debate by the Centre and several comments and suggestions were received in that regard. It may also be recalled that several articles in this column had also addressed the pros and cons of the negative list basis of taxation and as to the appropriate time of its introduction. The speech states that there has been overwhelming support for this basis of taxation and hence the government proposes to introduce the negative list basis of taxation from a date to be notified after the passage of the Finance Bill for the year. It is also stated that the negative list comprises 17 different heads of services and has been drawn up keeping in view the federal nature of polity, the best international practices and our socio economy requirements. The finance minister has also stated that in addition to the negative list, there would be several exemptions from the service tax as well. The speech concludes the reference to the negative list by informing that the changeover will result in reducing the nearly 290 definitions and descriptions in the law to 54 and in reducing the exemptions from the existing 88 to a mere 10. Clearly therefore, the changeover to the negative list basis of taxation is one of the key announcements in this year's Budget speech and industry has to majorly gear up to both fulfill its obligations under service tax law as well as to ensure that the input tax offsets are fully availed.

On the place of supply rules, the speech states that draft rules will shortly be placed in the public domain for stakeholders' comments and these will be notified when the negative list comes into effect. It is stated that these rules will determine the location where a services shall be deemed to be provided and will also provide a possible backdrop to initiate an informed debate on the issues that may arise in the taxation of inter-state or cross-border services under the dual GST. As regards the Point of Taxation Rules (POTR), the speech states that the extant rules are being rationalized for providing greater clarity and for removing irritants.

On the next enabler on aligning the central excise and service tax code, the speech states that a study team will be set up to examine the possibility of such a common code which could be adopted to harmonisation both the central excise law and the service tax law to the extent possible at the appropriate time. It is hoped here that the study team is not set up as an internal one and that its members extend to subject matter experts and others. Pending the constitution of the study team, the minister states that as a measure of harmomination between central excise and service tax, a number of alignments are proposed. These include a common simplified registration from and a common periodic return for central excise and service tax, to be named as EST1. As a very welcome measure, the speech states that this common return will comprise just one page, which will be significant reduction from the 15 pages of the two independent returns at present.

In conclusion, it must be stated that while it is indeed very disappointing that Budget 2012-13 has not set a date for the introduction of the GST, it nevertheless contains several significant measures which will accelerate and progress the agenda of the GST. As a key stakeholder, industry must continue to actively engage on the GST and bring about its introduction at the earliest possible time.

The author is Executive Director, PricewaterhouseCoopers Pvt Ltd pwctls.nd@in.pwc.com
http://www.business-standard.com/india/news/pranab-sets-stage-for-gst-sans-date/468167/


As Finance Minister Pranab Mukherjee on Friday presented the national budget for 2012-13 claiming that the economy was returning to normal, the common man didn't seem convinced. Many people rated his proposals from below average to poor.

With a "marginal hike in the tax exemption slabs" coupled with hiked taxes across most services, the budget is "nothing new", said Mohit Srivastava, an engineer with Jacobs Engineering company in Delhi. "It's below average. The tax exemption should have been provided up to Rs.5 lakh. That is what most of us expected," he told IANS.

The budget has increased the tax exemption bracket for individuals from Rs.1.8 lakh to Rs.2 lakh, meaning an annual saving of Rs.2,000 for all tax payers. At the same time, the service tax has been increased from 10 to 12 percent, across most sectors which would mean costlier airfares, gold jewellery and cigarettes and higher phone bills.

Investment banker Abhinav Tyagi, 29, claimed that the budget appeared to have been prepared to avoid any controversy or conflicts like the rail budget. "They have come up with an average budget. Basically, they don't want any more trouble (linked to opposition from government allies) like they had with the rail budget," said Tyagi. "It's the salaried person who will suffer. I will have to put on hold my decision to buy a new car," he added.

Agreed 40-year-old shopkeeper Raghunandan Jha. He said the budget meant inflated bills and more expenses due to the hike in service tax in most sectors. "If the bills for services like mobile phones go up, my expenses will go up, leaving me with lesser savings," he claimed.

For some the budget spells trouble. "My two daughters are to get married later this year and with the gold prices going further up I'll be getting sleepless nights now," 49-year-old homemaker Mamata Karnic told IANS.

"Everybody knows gold is an integral part of Indian marriages irrespective of religion or caste. The middle class is already reeling under the pressure of high gold prices and this budget will only rub salt into our wounds," she added. "He (Mukherjee) must have married off his daughters long back," said Karnic.

Some people did not find the budget a total disaster. "If you look at the positive side of the budget, consumer appliances like televisions will be cheaper and so will be lifesaving drugs," said student Aarti Mehra, 24.

In Mumbai, Harshala Nayak, a media professional, said: "There is nothing exciting about the budget this year. I expected the tax exemption limit to be hiked to Rs.300,000 for individuals, but it did not happen. Also the hike in service tax and other duties will only add to our woes."

18 MAR, 2012, 01.53PM IST, BINOY PRABHAKAR,ET BUREAU
What Budget 2012 has for Vijay Mallya, Naresh Goyal, Anil Ambani & other barons in trouble

Recent months have been tumultuous for tycoons such as Vijay Mallya and Anil Ambani, who are the faces of the businesses they head. Their once booming businesses have been struggling under the weight of factors ranging from cutthroat competition to a harsh economic environment.

Their companies are grappling with mounting debts, falling profits, fleeing customers and disenchanted employees. Put another way, they are all gasping for breath and fighting for survival. A turnaround, though not impossible, seems difficult due to these multiple problems.

Little wonder then that these businessmen have been knocking hard at the government's doors for help. Some of them prefer to avoid the term 'bailout', but have been lobbying hard for policies that would allow duty cuts, tax exemptions and access to cheaper loans, every which way to turn their companies around.

For these reasons, this year's budget was important to them like no other. Did the government lend an ear or was it tone deaf to their pleas? ET on Sunday finds out what the budget had for each of their businesses.

Aviation

Vijay Mallya, Chairman, Kingfisher Airlines

His Troubles: A mountain of debt, severe cash crunch, delayed salaries, shrinking fleet, fleeing pilots, scores of flight cancellations, falling number of passengers...there are plenty of reasons why Mallya is sweating over Kingfisher. Mallya, the face of the airline, is widely believed to be presiding over a dying business.

How the Budget Treated Him: The budget has provided airlines access to external commercial borrowings of up to $1 billion for their working capital needs. ECBs are cheaper loans and so Kingfisher can clear a part of the costlier domestic loans. But the budget did not heed to Mallya's long-standing demand to allow foreign airlines to buy into domestic carriers.

What Now: The big question for Kingfisher is who will give loans because of its problems. The brand has hit a nadir and finding a lender will be difficult. The FM indicated that FDI will soon be cleared, but few would be interested in buying a stake. Mallya can't loosen his (seat) belt yet.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/What-Budget-2012-has-for-Vijay-Mallya-Naresh-Goyal-Anil-Ambani-other-barons-in-trouble/articleshow/12308842.cms


Pressure tactics won't work: FM Pranab Mukherjee to bullion dealers
Finance Minister Pranab Mukherjee today bluntly told bullion dealers, who have gone on strike against the levies on gold, that their pressure tactics "will simply not not work".

Mukherjee in his budget proposals has doubled the basic customs duty on standard gold bars to 4 per cent and non-standard gold to 10 per cent. He has also imposed a one per cent excise duty on unbranded jewellery.

"I did it deliberately," he told PTI in an interview when asked about the three-day strike by bullion dealers across the country to protest the levies.

He explained that in two consecutive years about USD 90 billion of precious foreign exchange was used in importing gold making it the second biggest item of import after oil.

The Minister pointed out that people in India were "crazy" for gold because they invest either in real estate or this metal feeling that their value would go up.

It has also become part of Indian culture and in the south some political parties have decided to give free "mangal sutra", a piece of gold given to brides.

Rejecting the argument of bullion dealers that the levies would encourage smuggling, the Finance Minister said that import duty of upto five per cent did not not encourage smuggling. He had kept it only at 4 per cent and had no intention of increasing it further.

Asked about the strike by the dealers, he replied, "if they think they will put pressure, it will simply not not work."
 

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