'It's a positive Budget'

Rahul Bajaj, Chairman and Managing Director of Bajaj Auto Limited spoke with Ramesh Menon on what he thought of the Union Budget for the fiscal 2002-03.

"Overall, it is a positive Budget. Infrastructure spending, savings, reduced interests rate, better inflation rates. We may get fewer returns, but it is better in the long run.

"I am not one who praises the government or the finance minister, but I think people have not understood what he wants to do. The cost of production of a lot of companies will go down now.

"The peak rate of consumer goods could have been delayed by a year or two; not because I make scooters, but because this year growth is low. Overall growth of 5 per cent is because of the agricultural sector.

"In reality, there are a lot of positives. Petrol and diesel prices are down. This was a step in the right direction.

"Net increase of surcharge of 3 per cent is a negative point. But considering what India has gone through, we must accept it.

"Dividend tax is something that hits the middle, upper middle and the rich. He has rightly removed it from the corporates. He has removed everybody who paid a 10 per cent tax. Good.

"Capital goods sector has been left neutral. The 15 per cent additional direct tax on corporates is welcome. But this is only for increasing installed capacity. How many utilise our installed capacity. We first have to utilize our capacity.

"The auto industry has been left in the neutral gear. We did not expect anything. We did not get anything. But in India, a two-wheeler is more important than a four-wheeler.

"We are all pro-small scale industries as they provide employment and are great ancillaries. We complement and supplement each other. But reservations cannot continue. However, I realise this cannot be done overnight.

"For the industry, even the 5 per cent surcharge is okay in the hands of corporates. But if you are going to pay 30 per cent on the dividends, you will be mad and no one is going to like it.

"Raising taxes is no solution to reducing budget deficit. What he should do is widen the tax net. To cut down the budget deficit you have to cut non-Plan expenditure and subsidies. And also increase user charges. They seem to be moving in that direction, but I think it is a camouflage. Not enough is happening there. Unless there is some political will nothing will happen.

"You saw how our parliamentarians were shouting whenever the finance minister talked of cutting subsidies or increase in prices. It sends the wrong signal of where our parliamentarians want this country to go."

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