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February 28, 2001                                       Feedback  

    - EXIM POLICY '00



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'All the Budget announcements have been positive'

Inderdeep Singh

All the Budget announcements have been positive as our expectations were very, very modest.

The withdrawal of surcharge on direct taxes is very positive.

The dividend tax pay-out reduction from 20 to 10 per cent is very well put.

In terms of a labour law initiative, I hope the law minister will have a Bill introduced and passed quickly and states will also adopt the proposals, as labour laws urgently need change.

Excise has been reduced from 40 to 32 per cent, so we can expect an immediate reduction in sale prices of mid-size segment cars.

Many laws which are antiquated and many are contradictory to other laws. The answer lies not in Budget proposals, but with the law ministry and other ministries making laws up-to-date. Every law should have an expiry date and the process of updating and upgrading should begin two years before expiry.

The overall thrust of the finance minister in infrastructure, agriculture and heath are very positive and although one can hope for greater reduction in government expenditure in salaries and wages, the target of two per cent staff reduction for each of the next five years is very welcome.

I hope we can exceed this target.

The states must also adopt more ambitious targets to reduce manpower.

The sell-off of 27 profitable public sector units, including, Maruti, Air-India, Videsh Sanchar Nigam Limited has come in for criticism in some quarters and some wonder whether this is globalisation. They fear that India will become like Malaysia, Singapore and others in the Asia-Pacific region, which are facing economy slowdowns due to dependence on the US and other countries.

The answer lies in open competition, which is the best way to ensure benefits to the consumer. In the cases of Maruti, A-I and VNSL, we have already seen benefits accruing to the common man when competition was introduced in these sectors, with marked improvement in the quality of products and services and competitive pressure on prices.

Now that there are other players in the field, the government should encash its investment in these PSUs and use the funds for building infrastructure, health, education and improving quality of life, as those sectors will continue to provide better products and services.

The three companies are primarily serving Indians in the local environment. We do not have to worry about other countries.

After all, Indians can also buy the PSUs...

Inderdeep Singh is president and executive director, Continental Device India, and chairman, CII, Small Industry Committee

Budget 2001

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