Expert Zone

Straight from the Specialists

Budget 2013: Time for a responsible budget

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

Finance Minister P. Chidambaram has promised a “responsible” budget this time around. According to Webster’s dictionary, “responsibility” is associated with a legal or moral accountability, reliability, trustworthiness in relation with some burden.

What would this possibly mean for the budget’s key stakeholders — business, the middle class, investors and voters?

The UPA government has made welfare spending its primary electoral plank, which was activated a year before the financial crisis of 2008/09. Considering that election fever will take over by the middle of the year, let’s hope Budget 2013 will demonstrate responsibility when dealing with electoral interests.

Budget 2013: Need to review tax incentives

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(Any opinions expressed here are those of the author and not those of Reuters)

It’s going to be a tight budget this year and Finance Minister P. Chidambaram will be looking to save every rupee in revenue to reduce the budget deficit, to which he has committed. One option would be to withdraw tax incentives which have outlived their purpose.

The finance ministry is only too aware of revenue lost from tax incentives. In 2011/12, it was a loss of 5.29 trillion rupees. If tax incentives are withdrawn, the 2013/14 budget would be in surplus. Nothing would amuse the finance minister more.

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