Interactive Discussion of India's Budget for 2011-2012

Interactive Discussion on Union Budget 2011-12

Interactive Discussion on Union Budget 2011-12
The Consulate General of India, New York organised an interactive panel discussion on the Indian Union Budget on 28th February 2011, at the Consulate Ballroom. Representatives of financial institutions, academicians from various universities, company executives, media persons, and community members attended the lively interactive discussion.
Dr. A.M. Gondane, Deputy Consul General, welcoming the guests introduced broad outlines of the Budget and the Economic Survey. He stated that the Indian economy had come out of the sluggishness consequent to the global financial crisis in 2007 and was on the path of recovery with achievement of 8.6% growth during the current financial year and is projected to grow at slightly over 9% in the year 2011-12. He said that India’s GDP during the current year is estimated to be Rs.7877947 crore (US$ 1.75 trillion) at current market price. He stated that the Budget aimed at consolidation of the fiscal position of the Government bringing the deficit to 4.6% in 2011-12 and 3.5% in year 2013-14, encompassed inclusiveness with increased social spending on education, health and rural development, and would impart developmental orientation by way of increased spending on infrastructure, Bharat Nirman and the other vital sector of the economy.
Dr. Rajiv Sobti, MD, Chief Investment Officer, Nomura office at the World Trade Center, New York stated that the Budget was balanced with several vital sectors focused for growth. He stated that some explicit measures for developing the secondary market in derivatives would give a fillip to investments by financial institutions and funds from abroad. He appreciated the opening of investments in mutual fund by foreigners. He stated that bond and debt market opening was imperative for increased flow of funds from abroad to meet the gap between investments desired and domestic resources. He emphasized that real interest rates in India were low hence long term capital was not coming into India.
Prof. Surendra K. Kaushik, Professor of Finance, Lubin School of Business, Pace University stated that though the outlays on social sectors – health and education had been increased substantially, yet, the expenditure was not enough to meet the growing needs of the young demographics in India. Increased allocation amounting to 48.5% of total plan allocation for infrastructure was indicative of the focus of Government on development of infrastructure. He said that the taxation rate in India was rather low as compared to the United States and Indian tax collection was less than 10% of the GDP. He appreciated the exemption given to senior citizens over 60 years and another category of senior citizens over 80 years which was anticipating the future reality. Prof. Kaushik appreciated tax reforms underway including Goods and Services Tax (GST) and the Direct Tax Code (DTC) which were under discussion with several stakeholders including the State Governments and the intention of the Finance Minister to bring a Constitutional Amendment Bill to facilitate this was a very welcome step.
Mr. Sarav Periasami, President and CEO of PERI Software Solutions Inc. emphasized the importance of education and the necessity to bring about clarity for inviting foreign investment in education sector in India. He appreciated the increased allocation of funds by 24% over last year. He said that financial resources were not the only constraints but clarity in regulation would create a favorable climate for developing this very vital sector. He said that increase in Minimum Alternate Tax (MAT) by 0.5% will affect business sentiment. He also said that levying service tax on other services or bringing in more items under the excise would also be a dampener for business sentiments.
All panelists felt that though growth was an imperative for raising the level of living standards, control of inflation was also very important. Inflation was detrimental to fixed income and lower income groups and supply constraints should be progressively removed.
In the lively question-answer session, comments about current account deficit, declining FDI, comparison of growth in China and India, encouragement to innovation, contribution of non-resident or persons of Indian origin abroad, etc. were responded to by the panelists.
The lively interactive discussion was followed by dinner.
Event From Date : Feb-28,2011 Event To Date : Feb-28,2011