Under ordinary circumstances balancing a linear equation-that is what the Budget is all about-is a simple task. But these are extraordinary times. The ruling United Progressive Alliance is a coalition of 14 partners, some unlikely bedfellows. Then, there's the Common Minimum Programme, a vision statement of the new government put together by the 14 and vetted by the communist parties that support this government without being part of it-at once both a guideline for policy making or a plain old-fashioned millstone around the neck.

These are the constraints reformist-at-heart Palaniappan Chidambaram, the country's Finance Minister, will have to take into account when he sets out to balance the fiscal equation the best he can. It won't, as we have implied before, be easy: little money is likely to flow in from the government divesting its stake in public sector companies (the CMP all but rules out the disinvestment of profit making government companies); subsidies, an important component of non-development expenditure cannot be reduced; and the need to increase public investment in agriculture and rural infrastructure, one that has been articulated and articulated and articulated, will only exacerbate the situation.

Taxes, then, are the great white hope. With the economy on a roll, tax collections in 2003-04, at Rs 252,162 crore were 18 per cent higher than the budgeted estimate, the first time such a thing has come to pass since 1995-96. There's always the threat of a slide in the manufacturing sector's fortunes impacting this-despite accounting for a quarter of the Gross Domestic Produce, manufacturing accounts for 66 per cent of total tax collection-but the UPA's stated objective of attracting investments in manufacturing reduces the chances of this happening. However, much of India's tax revenues (as opposed of that of any developed country's) comes from indirect taxes such as excise and customs. In the long run, these have to be rationalised (read: reduced), should India wish to be part of the World Trade Organisation. Ergo, Chidambaram may have no option but to look at increasing revenues from direct taxes. That could explain the buzz emanating from North Block about an additional 20-30 services being brought under the service tax net.

If the Finance Minister is able to convince the communists about the need to rationalise income taxes-this would be in keeping with the spirit of the Kelkar Committee report that suggests the scrapping of most exemptions-he may well be able to achieve the twin objectives of increasing consumer spending (less taxes equals more money to spend) and increasing tax revenues (an easier tax regime should lead to greater transparency and help bring more people into the tax net). That, though is easier said than done. As far as Budget 2004 goes, this writer expects a mathematical, not strategic approach to addressing the fiscal deficit. P.S: He will be happy to be proved wrong.

-Ashish Gupta

BLACK MONEY
Will The New VDIS Work?

The short answer to that is yes, but only just. As Arvind Virmani, a former advisor to the Finance Ministry, and now the CEO of the Indian Council for Research on International Economic Relations puts it, every Voluntary Disclosure of Income Scheme, targeted at helping the fat cats of the parallel economy turn their treasure hoards legit, albeit after paying a penalty, "is a zero-sum game because after the initial blip in tax collection there is no increase for the next two or three years." Still, it is almost certain that the Finance Minister will launch the 28th-odd such scheme in India's history to unearth black money and increase the government's revenues.

-Ashish Gupta

What Can The FM Do?
A quick pre-budget tour of the possible and the probable.

AGRICULTURE
Although this is a state subject, Finance Minister P. Chidambaram can help the cause of agriculture by increasing government spend in the sector (and in the development of rural infrastructure). That will send a message to the states on the intent of the central government.

MANUFACTURING
N. Srinivasan, the Director General of Confederation of Indian Industry, wants the budget to facilitate investments in manufacturing. The Finance Minister could well do that by focussing on the development of infrastructure, doing away with procedural delays, and drafting a roadmap of tariffs for the next three years.

SERVICES
The services sector has blossomed and thrived without state patronage (or intervention). A world class infrastructure (think airports, power, and the like) and a continued supply of talent (think engineers, biochemists, and others) are requisites for the boom to continue. The Finance Minister can help by focussing on infrastructure and primary and secondary education.

EXPORTS
Most export-subsidies are gone, but Rafeeque Ahmed, the President of Federation of Indian Export Organisation, maintains that tax rebates on export income should continue till transaction costs in India are down to global averages. That's something the Finance Minister can well do.

CAPITAL MARKETS
The bulls will be back, claims Ajay Bagga, the Chief Executive Officer of Kotak Mahindra Mutual Fund, should the Finance Minister make one important announcement in the budget. "He can impact the capital market significantly by reducing or eliminating capital gains tax on share transactions." Will he dare?

-compiled by Ashish Gupta

Heiress Tracking
Vanisha Mittal isn't the only heiress of note out there.

Schauna Chauhan
Daughter of: Prakash Chauhan, Director, Parle International
AGE: 27
SIZE OF BUSINESS EMPIRE: Not Disclosed
EDUCATION: Bachelor's degree in International Management from the Lausanne Business School
DESIGNATION: Executive (Operations), Parle International Private Limited (Parle Group)
HOBBIES & INTERESTS: Movies

For someone who grew up frequenting dad Prakash Chauhan's factory in Andheri in suburban Mumbai, it was understood that Schauna, the eldest of the three daughters, would take over the reins someday. Today, as Executive (Operations), Schauna has set her eyes on the globe. While Frooti is already being exported to the US, Canada, the Netherlands and Maldives, she now wants to set up plants or get into franchisee networks overseas. She is engaged to Bikram Saluja, a former model and actor.

-Priyanka Sangani

Vismaya Firodia
Daughter of: Arun Firodia, Founder and Chairman, Kinetic India
AGE: 28
SIZE OF BUSINESS EMPIRE: Approximately Rs 1,200 crore
EDUCATION: Graduated with honours from Princeton University, NJ, USA, in 1997 with a Bachelors degree in Management Systems
DESIGNATION: Vice President (Corporate Communications), Kinetic India
HOBBIES & INTERESTS: Scuba diving, marine life preservation, reading (mostly fiction)

Having literally grown up with the company-it was founded around the same time she was born-it wasn't surprising that Vismaya Firodia always nurtured a dream of eventually working there. Although older sister Sulajja is more active in the actual management of the company, Vismaya handles most of the marketing support functions and corporate communications.

-Priyanka Sangani

Akshata Murty
Daughter of: Narayana Murthy, Chief Mentor, Infosys Technologies
AGE: 24
SIZE OF BUSINESS EMPIRE: Owns 12,65,981 shares (valued at around Rs 665 crore)
EDUCATION: Under Grad Major at Claremont McKenna College, LA. Majored in Economics and French. Goes to Stanford for an MBA this fall
DESIGNATION: Consultant, Deloitte and Touche (USA)
HOBBIES & INTERESTS: Reading and music

Akshata Murty makes it a point not to highlight whose daughter she is, so as to avoid any 'undue advantage' or publicity. On occasion has been heard mentioning that her father "just works in the IT industry in India". Not that he is the IT industry in India.

-Venkatesha Babu

Vidula Khaitan
Daughter of: Manjushree Khaitan, Director, Kesoram
AGE: 25
SIZE OF BUSINESS EMPIRE: Rs 4,500 crore
EDUCATION: MBA from Indian School of Business, Hyderabad
DESIGNATION: Head, Vidula Consultancy Services Ltd
HOBBIES & INTERESTS: N.A.

Grandpa B.K. Birla wanted her to learn the ropes at Vasavdatta Cement, a unit of Kesoram, but that innocuous move set the grapevine abuzz that he was training Vidula Khaitan to take over the reins when he quit. He calls it "wishful thinking", but the buzz refuses to die.

-Arnab Mitra

Q&A
"The Fee Issue Took Away Most Of Our Working Time"

Directorships of the Indian Institutes of Management are usually pretty uneventful. All it involves is a truckload of administrative work, handling a few minor academic crises, and weathering the fallout of a less-than-complimentary ranking by a magazine (several, including this one, rank B-schools). 57-year-old Bakul Dholakia, the Director of the Indian Institute of Management, Ahmedabad (ranked #1 in Business Today's roster of India's Best B-schools), and an industrial economist by qualification, discovered there was more to it when former HRD Minister Murli Manohar Joshi tried to get the IIMs to reduce their already-low tuition fee. Dholakia and the other directors saw that as political interference in the functioning of government schools that had always enjoyed reasonable levels of autonomy. The man led the other IIMs to battle, one that was settled by the defeat of the National Democratic Alliance to which Joshi belonged, in the elections to the 14th Lok Sabha in May 2004. Dholakia spoke to Business Today's Sahad P.V. on the resolution of the fee imbroglio, and reports of IIM-A's global aspirations.

Finally, the IIM fee issue has been resolved...

Yes. We have decided to retain the last year's fee (Rs 1.58 lakh per annum). As for scholarships for the needy students (whose family income is less than Rs 2 lakh a year), we have increased the provision from Rs 25 lakh to Rs 1 crore a year.

The change in political dispensation has helped your cause.

Of course, that has helped the resolution of the fee issue. Our entire time had been taken up by this for the last few months.

What next? Are you setting up a campus in Cairo?

The reports about our setting up a campus in Cairo are wrong. The Egyptian government has been talking to us for helping them set up a management institute in their country. This is part of institution building, and is entirely different from setting up our own campus.

So, you have no immediate plans to go global?

We still haven't thought through it fully. Currently, we are setting up a new campus in Ahmedabad, close to our existing premises. We are also working on a campus in Mumbai, which was decided sometime in 2002. However, we are not ruling out any overseas campuses. In any case, we are expanding our global presence through executive management development programmes, which we conduct overseas from time to time. We have already done it in Kenya and Sri Lanka. We are also exploring South East Asia and Europe.

FEE-WATCH
IIM Tracking
What the six IIMs have decided in terms of tuitions.

IIM-A: Will retain old fee structure (Rs 158,000 a year). Has refused government aid and will continue to offer assistance to students from families earning less than Rs 200,000 a year. The corpus for this scholarship has been quadrupled to Rs 1 crore a year.

IIM-B: Will retain old fee of Rs 150,000 a year. And will increase the total value of scholarships to Rs 75 lakh from the existing Rs 25 lakh.

IIM-C: Will retain existing fee of Rs 127,000 a year and has decided to provide a need-based scholarship along the same lines as the one offered by IIM-A. The school plans to tap alumni and corporate donors for funds.

IIM-L: The school has no plans to change the existing fee of Rs 1.3 lakh a year. It has also decide to waive this in its entirety for students whose families earn less than Rs 200,000 a year. However, it will accept aid from the government as its corpus is a mere Rs 8.5 crore.

IIM-I: It has left the tuition fee unchanged at Rs 108,000 a year. It plans to offer assistance to students from families earning less than Rs 200,000 a year; money will be raised from industry and alumni; until then, it will come out of government funds.

IIM-K: It has decided to retain last year's fee of Rs 110,000 a year. Like the other IIMs, it will offer a need-based scholarship for students with family income below Rs 200,000 a year.

-compiled by Amanpreet Singh