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|February 28, 2001||Feedback|
'There is no incentive in the Budget for small savings'
Generally speaking the Budget is good and not as harsh as expected. On a 0 to 10 scale I would rate it at 7. There is a lot of rationalisation in excise and custom duties that has taken place and the surcharge has been dropped, both for personal income tax and for corporates. This is very welcome. I wish the deduction in Section 80(L) (deduction given on interest earned from deposits with banks and government securities) was not there. No specific incentives have been given for domestic savings.
Specific to the power sector, the finance minister has articulated the need for reforms in this sector very well. He has emphasised that the sum of Rs 36,000 crores was a cumulative loss for the electricity boards and the Centre, and Rs 25,000 crores of revenue is due to the Centre. Specific efforts are to be taken to reduce the T&D losses, with specific reference to thefts. He has also said 100 pc metering will be done by December 2000, which is a good decision, especially when it is time-bound.
He has also said there will be 100 pc energy audit at all levels but has not given a time limit, which would have been welcome. Ten-year tax holiday is a good relief, even though the CII asked for 15 years. One significant point is that the prime minister is personally chairing the meeting on power sector reforms on March 3. We are hoping that some definite conclusions will be reached and an action plan will be defined.
As for the power sector, we are looking forward to more rationalised power tariffs as suggested by the finance minister, from the CERC and the SERC.
There will not be any major difference to consumer durables because of the Budget.
Small savings form a significant part of resource generation and from 26 pc, it has come down to 21 pc. There is no incentive in the Budget for small savings, hence the percentage is not likely to go up and the government is losing the possible revenue that it could have generated from the public. As compared to other parts of the world, domestic savings is very significant in India.
K Vasudevan is Director, Alstom Ltd