Singapore, 10 July , 2004
PTI

Billing the Indian budget as a "miracle," eminent non-resident Indians and leading economists at a high-powered NRI summit in Singapore on Saturday complimented the Manmohan Singh government for introducing new taxes, continuing reforms and promising a fair growth in GDP as well as fiscal prudence.
Describing the budget as populist and economically sound, Bhaskar Ghose, Managing Director and CEO, Indusind Bank, told the summit that the banking industry as well as the common man would benefit a great deal with new proposals framed by Finance Minister P Chidambaram. | Discuss: Do you think the Union Budget is a budget of deception and deceit? |

Addressing a session on implications of the budget, Ghose said there was no change in the small savings interest rate and the benchmark ten-year bond yield will probably remain rangebond at least in near term.

The budget, he said, showed commitment for a stable interest rate regime with strong emphasis on market driven interest structure.

He said amendments envisaged by the budget in securitization act should expedite the process of recovery even as it addresses Supreme Court's concern regarding a fair deal to borrowers.

Prasenjit K Basu, financial wizard and Managing Director, Robust Economic Analysis, hailed the budget as a miracle and said India had made progress in fiscal reforms. He said tariff reduction, financial sector liberalisation and industrial delicencing would contribute to more efficient capital allocation.

Basu said transaction tax on each stock market trade was steep .15 per cent but was offset by addition of long term capital gains tax removal and a cut in short term capital gains.

However, he said, negative features of the budget were levy of two per cent cess on all services for education, hike in service tax from eight to ten per cent, tax on interest on NRI deposits, and increase in excise duty on steel products and non-ferrous metals.

The positive features were five year tax holiday for new investments in food processing to ensure agricultural value addition and rural hospitals, 150 per cent exemption for R and D in automobile sector. He said the budget was "positive" and had belied fears that the Communist parties may influence the government.

Rajesh Kapadia, a financial wizard and partner, G M Kapadia and Co, said the direct tax proposals envisage penetration of 34 million people with seven million paying taxes and 14 million filing tax returns.

The tax structure was simplified, he said and welcomed the new proposals on removal of tax exemption on long-term capital gains and a cut in short-term capital gains.

Ram Buxani, NRI from Dubai and Vice Chairman of Overseas Indians Organisations, said it was an excellent budget presented by the Manmohan Singh government despite withdrawal of exemption limit on NRE deposits. However, he felt that this would not affect the flow of foreign funds to India by way of NRI deposits.

The budget reflected that there should be a sense of commitment of NRIs to India, he said.