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February 27, 1999
'A surprisingly good Budget'
Arun Bharat Ram
I would say it is an overall surprisingly good Budget because of the constraints the finance minister has been working with. I see there has been a great deal of thought on how to make the Budget more transparernt. This is evident from the fact that excise duties have been cut from 11% to 3%. This will bring about simplification and transparency in the system.
I am happy that the finance minister is empowering Panchayats for development and spending funds directly in the rural sector. This will improve the delivery into rural areas.
The finance minister is using the housing sector as a means for generally reviving industry. He has talked about the foreclosure laws being strengthened and giving a higher exemption for interest on housing loans which will increase the demand for housing.
The reason for the recession continuing so long is partly that the government has been perceived to be unstable and therefore unable to take tough decisions for economic development. Many of the steps announced in this Budget will lead to building confidence within industry.
Coming to the capital markets, the steps regarding mutual funds has been very positive and I expect the small investor will come back to the capital markets to the mutual funds.
I am happy with the announcement on business restructuring pertaining to amalgamations and demergers and the treatment of tax with respect to this. This will certainly enable companies to have better structures to add value to shareholders.
Arun Bharat Ram is a wellknown businessman
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