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| Coalition Budgets |
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Budget 2004 is the ninth successive coalition budget. here's how
it compares with the other eight.
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| By Ashish Gupta |
| BUDGET
2004: P. Chidambaram unveils a clutch of sops
for agriculture, increases ceiling on foreign direct investment
in telecommunications, civil aviation, and insurance, focuses
on the investment thingamajig and introduces an education cess
but still manages to make everyone happy and reduce the fiscal
deficit to 4.4 per cent of GDP. Between-the-lines message: I'm
just warming up; now wait for next year. |
OUT OF THE MAXIMUM
OF 10
8
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| BUDGET
2003: Jaswant Singh announces a big push (think:
Rs 50,000 crore) for infrastructure, rationalises indirect taxes,
increases ceiling on Foreign Direct Investment in banks from
49 per cent to 74 per cent, makes dividends tax-free in the
hands of investors and actually manages to up the price of fertilisers
(he eventually rolls back part of this), in the National Democratic
Alliance's best budget ever. |
8
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| BUDGET
2002: Yashwant Sinha goes all out and increases agricultural
credit to Rs 75,000 crore (from Rs 64,000 crore), announces
an accelerated rural electrification programme, provides concessions
for private sector companies participating in infrastructure
projects, decides to set up asset reconstruction companies,
and rationalises indirect taxes. He is forced to roll back measures
removing tax on dividends in the hands of investors and increasing
the price of liquefied petroleum gas. |
7
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| BUDGET
2001: In his finest hour yet, Yashwant Sinha announces
a budget that reduces direct taxes, paves the way for a softer
interest rate regime, increases the ceiling on foreign institutional
investor (FII) holding in companies to 49 per cent, and touches
upon sensitive second-generation reforms. Instantaneously, India's
most pilloried Finance Minister becomes a sensation, although
the outpouring of positive sentiment eventually results in nothing.
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8
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| BUDGET
2000: P. Chidambaram may have set off the process
of disinvestment but it is Yashwant Sinha who, in his third
budget, first talks about reducing the government's stake in
non-strategic public sector companies to 26 per cent, thereby
revitalising a languishing process. However, his efforts to
rationalise indirect taxes create much confusion thanks to three
special excise rates of 8 per cent, 16 per cent, and 24 per
cent. |
6
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| BUDGET
1999: In his second budget, Yashwant Sinha makes
no attempt to prune the country's interest payments and defence
spend, and actually imposes a 10 per cent surcharge on direct
taxes. He does make up for this by rationalising indirect taxes,
increasing the ceiling on foreign direct investment in the pharmaceutical
sector to 74 per cent, and starting down the path of fiscal
reform, but the overall theme of the bill is of an opportunity
missed. |
6
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| BUDGET
1998: As expected, Yashwant Sinha's first budget
is a clever mix of populist measures targeted primarily at the
rural electorate, procedural reforms, especially in the area
of direct and indirect taxes, and brave moves such as opening
up the insurance sector to private and foreign players, although
it must be added that this idea is his predecessor's. |
6
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| BUDGET
1997: In what comes to be known as the Dream Budget,
P. Chidambaram opens up health insurance to private players,
announces the New Exploration Licensing Policy for the entry
of private companies into oil exploration, brings more services
under the service tax net, improves the quality of tax monitoring,
and rationalises indirect taxes. In short, the man does everything
he could to improve the investment climate in the country. |
9
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| BUDGET
1996: P. Chidambaram's first budget is a mixed bag.
He imposes a minimum alternate tax (mat) on companies that do
not pay corporate tax and announces a special customs duty of
2 per cent on all imports to fund infrastructure projects. However,
he does balance things some by reconstituting the Foreign Investment
Promotion Board and stating that its target is to attract $10
billion of investment a year and establishing the Disinvestment
Commission. |
7
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