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  • grieving.

  • Welcome back to analysis of the budget.

  • We were looking for big ideas.

  • So what will be discussing tonight?

  • Were there any really big ideas or that wasn't more quantity rather than quality, or what they wanted to big ideas that were hidden in the fine print?

  • We're also looking for a savior budget, a budget in a crisis because the economy is in deep distress and we needed something to boost demand so they could have gone either way.

  • They could put hands money in the hands off farmers rules.

  • Demand is at its lowest point that most of us can remember.

  • They could have done that, but what have they done when re guys down?

  • Bm Kasan money that goes out 75,000 calls the same as budget estimate last, and they couldn't spend that amount.

  • So instead they decided to go maybe sensibly.

  • Many of you would agree with infrastructure infrastructure where is now totally dependent when you look closely at the figures totally dependent on a huge disinvestment, target the disinvestment target.

  • If we don't reach, it will not get infrastructure.

  • This investment target for this year coming here is 210 lack crows.

  • Never before the last time it was 65,000 close 1 30 Gonna go from 65 to 210.

  • Black crows.

  • It's a huge ask would be very, very dependent on that coming through.

  • And it does take time.

  • Of course, they do have a lycee, but we have some issues that we need to discuss about.

  • Ally sees.

  • So with all these different options own car.

  • Well, the budget donna economy around.

  • Give us hope for that.

  • We really need it.

  • If I were facetious, I'd say my Brigitte Bardot visit.

  • But I mean, but I mean, honestly, honestly, I mean, I I have been so disappointed not because of the length of the speech or all of it.

  • In a time when you needed a completely focused budget.

  • Your cupboard is bare when you're covered his bear and you want to do a boost.

  • Pick three or four things for Max and really give it ammunition, right and ensure that it is going to be worked out and done within the year.

  • Instead of doing that, you take up every project which at one point or the other, the prime minister has given his sanctity to and you decide to put bits and bobs into it all the way through the budget without any direction.

  • It's a budget which has no structure.

  • I mean, it's one of the worst budgets I've come across in the last 30 years, if not the worst.

  • Tell us what you really feel.

  • Region.

  • No, but you have a point in the sense that this was a time when you needed we're in a crisis.

  • We needed a crisis budget.

  • And it's just a budget for a normal year.

  • Actually, we have with us Doctor Amit Mitra, the Finance minister.

  • West Bengal.

  • Thank you very much for joining us before.

  • Before I ask you about this budget, I do want to surprise all our Panelists on the viewers by asking which was the state last year of India, which had the higher fastest growth rate last year, stayed GDP.

  • I'll give you three off.

  • Well, believe it or not.

  • Sorry.

  • Yes, I believe you're asking me.

  • Yeah, you're asking.

  • Well, I'll tell you right now you're asking me.

  • Well, I'm delighted to say it's West Bengal.

  • According to government of India data, 12.58% growth of GDP last year.

  • 18 19 On this year, the data is just coming in when India is going at 5%.

  • I got into you today.

  • West Mingle will grow a double digit for sure over 10% again.

  • My God So yes, West Bengal.

  • India needs to learn from West Bengal.

  • But we've been saying that for ages they're not catching up.

  • But tell us now coming to the But today's budget is this going to make us go from 5% to 7% to 8% Get us out of, ah terrible slump that we're in very, very disappointing and I think, as own Car said, I agree with him its direction less not.

  • We need to understand that the GDP lowest in 11 years.

  • Private consumption expenditure lowest in seven years.

  • Investment lowest in 17 years.

  • Manufacturing lowest in 15 years.

  • Agriculture wasting four years and most of importantly, your indexes.

  • Three major indices that have fallen Global hunger index.

  • Do you know that we've come down from 99th position, 203rd position further down, and Pakistan is ahead of us.

  • Enjoy Sri Lanka Global Social Mobility Index by the world Economic forum just published We become 76th out of 82 and you very well know Democracy Index.

  • We fell by 10 points.

  • So you're not only talking about the numbers that you're talking to talking about the qualitative decline off the entire economies, supply chain management, the deep rooted problems with regard to different sectors you won't get into.

  • And in this environment, what do you expect?

  • I would have expected a rambunctious budget, which takes risks, which says, Okay, I'm gonna pull this economy out of its current stupor with bold moves.

  • What in fact happens more than toe to our speech with lot off poetry and drama, and what comes out is a whimper without direction, without clarity.

  • I was sitting there thinking, Wait a second.

  • Very.

  • Are you taking the country toe?

  • Pull it out of this, Morris.

  • Where are those solid Marcus?

  • I was most surprised that even those which are there having undermined the core off core schemes allocation falls by negative 9%.

  • You're talking about Mahatma Gandhi.

  • The 100 days work reduced by 13% jobs and skill development.

  • I heard a lot of it in the budget.

  • Fact is allocation reduced by 7% reduced negative 7% and commerce and industry again.

  • I heard a lot about that.

  • I happened to look after Commerce, Industry Ministry as well.

  • Of the small state of Bengal, commerce and industry reduced our location by negative 4.8%.

  • So where is this to me?

  • It looks like we were in I C U.

  • And now we're being pushed into the ventilator.

  • As far as the Indian economy is concerned, I'm worried about that.

  • But what you from I C u the ventilator?

  • Is it compared your on a ventilator now?

  • But were you expecting too much?

  • A lot of people are disappointed with the lack of any direction in this budget, but people expect too much off from a fiscal stimulus.

  • So my sense is that if you be realistic, there wasn't much fiscal space.

  • You've done monetary easing.

  • There wasn't much that you could do in terms of macro policies.

  • So people were expecting that either she will do too much off our fiscal stimulus and have large deficits.

  • And then there were those who were arguing that if she does that, then you know you could fall in towards debt trap because currently we have high interest rates and not very high growth rates.

  • So to be realistic, there wasn't so much that could be done, given the way tax revenues have, especially since corporate tax that dropped by 150 like crows.

  • I mean, that was a terrible decline compared to the budget estimate.

  • And if your tax revenues are not doing well, GSD has not been doing well.

  • So if your tax revenues are not, But that's again, a reflection of the state of the economy.

  • So you're so Amit Mitra, would you have liked to see a bigger punch in terms of expenditure in this one kind of crisis here, and let the budget deficit will get a little bit not out of control, but go to 44.5%.

  • Is that what you'd like?

  • I think what is important is there is a bluff element in this, which I'd like to bring to your attention.

  • The target for budget deficit was 3.3%.

  • They have admitted that target is 3.8% but the former finance secretary of India has just written a beautiful blawg in which he estimates that This is a bluff and I say it again.

  • It's a bluff.

  • Why?

  • Because off budget monies are being quietly put in a word for your listeners.

  • What is an off budget?

  • You basically want, for example, the railways to have a scheme.

  • So you get the Finance Corporation of the Railways to pay for it doesn't come into your budget doesn't become a part of the fiscal deficit.

  • Same way, part finance corporation piece what Mr Garlic suggested and I agree with him.

  • The rial deficit is in fact, much, much higher.

  • It ranges between 5% to 6.3% according to two different studies because of the off budget cheating.

  • I'm calling this bluff and let me tell you the order to control an auditor.

  • Generalised said officially bring made this transparent.

  • Tell us why you're quietly hiding below the budget.

  • All kinds of boring Zen expenditure.

  • What is your policy?

  • So my submission to you is that instead off hiding this come up and have the courage to say okay, I'm gonna go for 4.5% fiscal deficit which will result in downgrading of India by some agencies which may result in withdrawal from my stock market.

  • It is a considered risk you take from which you steam McCain's e and stimulation of the economy, which all economists understand.

  • This was the time this was the time that because of man made impact off if a d monetization and unprepared ust you cannot corrected by simply bump rhyming the economy a bit here and there out of a business cycle, it has to be a big hit.

  • Now, question is not only there is no big it.

  • What has been cut is from the bottom of the pyramid in terms of putting money into the hands of the agricultural sector, putting the money in the hands of the small and medium enterprises where the maximum marginal propensity to consume is at the bottom.

  • We, the upper middle class of middle class, we save much more, so we don't put back into the market corporate tax cut.

  • Nothing went back into investment.

  • So my submission to raise it not only risk was not taken with regard to fiscal deficit, whatever was taken avoided.

  • Those very people who were can spend the money in the market at the bottom and middle end of the pyramid right.

  • Thanks very much.

  • Very clear.

  • And you know your economics inside out.

  • You've done it for years.

  • Private sector now in the government Just wanted clarify marginal propensity to consume.

  • You mean they consume more of the income than the middle and upper middle class is the savings are less than I should put your hand one in their hands if you want demand to go up who can spend much more policemen?

  • Lawyers to add, uh, Brian gets Give me 30 seconds.

  • Yes, you're on l I c I heard you mention jealousy.

  • Yes.

  • Life insurance co operation today has 30,000 crores as nonperforming assets.

  • That is a big worry.

  • No.

  • Why?

  • Life insurance has been forced by this government toe by private sector any day any, um, shares to be sold.

  • So you know it bought 7000 crores worth off.

  • Call India that phone call investment public sector phone call and has outside.

  • I mean phone call investment from one public sector being forced to buy from another public sector and nobody knows it.

  • Now you end up saying I'm not gonna privatize a lycee.

  • Hello.

  • Ally sees 30,000 crores of np A because you made L i c and l I see something in all of us.

  • I'm sure have something in l i c, the common people.

  • It's a very dangerous proposition, right.

  • You ruin it.

  • And then you say, OK, now I'm going to sell.

  • Sell you off.

  • At least it'll make it transparent, right?

  • What least will be transparent door up?

  • That's something that worries you that if you go into stock market, you have to disclose if you doing, I pull.

  • You'll have to disclose all your holdings and all the dirt will come out.

  • But let's be honest.

  • The desk been accumulated over 30 40 50 years.

  • Everybody is passed on the buck.

  • Every every government that makes the foreign governments on that.

  • Yes, but tell me, oven this 210 lack crows for privatization.

  • When last year did it 65.

  • Is that Is that a crazy number?

  • They just had to do it.

  • Bring your You've done this many times, not fiddle the numbers to make sure your deficit is looks good, work backwards.

  • First, liketo give a perspective, which is different from the one you had If I made Yeah, yeah, sure of course.

  • Now, when you're talking about the budget and GDP right, which is my focus.

  • Right.

  • Primary emphasis on reform.

  • There are three aspects.

  • One is the fiscal deficit.

  • Right.

  • The fiscal deficit has expanded by 10.5% which is thought to be the maximum under the F r B m.

  • I would like to hear.

  • Does anybody wanted to have expanded by more than five plus 50.5 or less than I think that is that they did the maximum?

  • You know, that is a little off balance sheet.

  • I'm sorry.

  • I'm sorry you have dealt with these things for 25 years.

  • That's why I don't surprise You don't remember 11 year in which there was not a CIA bordering from from banks.

  • Okay, That was never on the budget.

  • Just because it's not from the banks but from another source doesn't change anything.

  • So what matters is the change change from before?

  • I have not seen a single number I've seen.

  • I've talkto private analysts will given me numbers that it is excellent I which is no transparent it is in the budget.

  • It is not correct that it's hidden.

  • The government has listened to these analysts and it's there in the budget in a separate appendix.

  • So if you want to pursue that, I'll come back to it.

  • The second aspect is expenditure.

  • Okay, Within that 0.5, what can you do?

  • You can only shift expenditures from one head to another.

  • The key even you're talking about GDP is the multiplier, the expenditure multiplier.

  • There is an R B.

  • I study these numbers I have not seen.

  • I just heard them.

  • The numbers quoted a little while back that the infrastructure multiplier is three the Madrigal multiplier.

  • This 30.5 now you want to shift it from infrastructure to Mandrake offshore?

  • Go ahead.

  • But don't tell me that it's to promote GDP.

  • Okay.

  • Second, before you believe those numbers, they're not approximately correct the direction.

  • I don't believe the exact number, but the relative stuff Yes, I believe over what period of time?

  • You know, structure three.

  • You have a different view.

  • You not let me finish my question on your statement.

  • You want to get the economy out of a trough right now.

  • Infrastructure takes how long to get your treat?

  • Multiplayer of three.

  • Well, these infrastructure projects are not starting today they're going on.

  • Somebody just said that there is not enough money, so if you move the money in there, they will come back to your third point.

  • Third point is very quickly.

  • Okay, It's but it's a good which is actually the negative.

  • I don't think they've done enough.

  • Is the tax reform if you wantto, she can tell you more about animal spirits, credibility, et cetera.

  • I'll only say this because everybody has criticized the corporate tax, which I 100% supported.

  • Why?

  • Because in the second budget off, call it India.

  • 123 I don't know what you want to call it.

  • Call it the one they had promised this okay, and it has not been done for five years.

  • I think that credibility was gone.

  • The animal spirits were down partly because of that that they promised something and didn't do it for four years.

  • So they had to do it to the store credibility.

  • I don't agree, but where I am a little disappointed is that direct tax court.

  • I think it would have bean vital for reform for stimulating the GDP.

  • Unfortunately, they have adopted incrementalism and not a big bang approach.

  • That's a good to have the alternative perspective joining us now, is there a scoundrel, I think.

  • One of the most greatest perspicacity person with perspicacity I've known.

  • And you're on the ground.

  • You where you got your hands dirty and you proved you're a successful entrepreneur and manager.

  • What's your overall take on this budget?

  • We're paranoid.

  • I would compliment the finance minister for showing fiscal discipline because if you had not done that, we would have had runaway inflation, which we were very high interest rate.

  • And you would recall what happened in 2008 when we did away with fiscal discipline and then where the inflation.

  • We had double digit inflation, very, very high interest rates which virtually crippled our economy.

  • So I think she didn't have much headroom.

  • And I compliment her for showing some discipline there.

  • The as far as privatization is concerned Or or I mean this this target off to lack, I think it's too like 1000 corrodes 10.

  • Yeah, it's very It's very ambitious.

  • Uh, in the past, they've never met those targets.

  • I do hope that, like Mr Watch by they would create a ministry is separate ministry a separate department for this investment and put a competent minister there like Mr Vash bite put on Suri, somebody who's willing to take the risk, somebody who's aggressive so that we actually start achieving these targets on this year.

  • It's very important.

  • Crucial, actually righted the whole third, I hope.

  • Depends on getting that.

  • Those revenues in 210 black crows.

  • Go ahead, Kurt.

  • You know, apart from that, I feel it should be three lack roads.

  • I mean, we have any number off P issues which are bleeding for the last so many years.

  • We keep saying we will privatize them.

  • We will be even disinvest.

  • But yet nothing happens.

  • And that's a huge burden on our economy.

  • So I hope that they put this on a fast track, right?

  • Tell me something about next.

  • I would say sorry.

  • Go ahead.

  • Go ahead.

  • Go ahead.

  • No, please.

  • Putting privatization on a fast track.

  • We remember the Congress Party.

  • Didn't really believe in it.

  • Couldn't even use the word privatization.

  • Call it this investment.

  • They're all socialist.

  • Is that actually even this government's DNA?

  • They really believe I don't believe in private sector taking over public sector unit.

  • They believe will make the public sector more efficient.

  • So is it a ideological problem On top of just a numbers problem and implementation problem?

  • I don't think it's an ideological problem and besides, they can take that political risk.

  • They have four and 1/2 years to go, and if they don't do it now, this will never happen.

  • And the country will keep on paying for these lost making peace use.

  • So I'm all for rapid privatization and I do hope that they would do so.

  • You were going to make 1/3 point before interrupt.

  • See?

  • Yes.

  • You see, the the real employment generator is the S M E sector and that is suffering.

  • It had a double shock off demilitarization and thereafter the gsd small Any never recovered from that.

  • Now how do we get How do we get that going?

  • Especially the labor intensive export industry.

  • And for that I would urge the government to let the rupee weaken because today we have known competitive in the export markets because our our rupee is overvalued.

  • I know that that a lot of our imports are especially in the oil sector.

  • That would get affected.

  • But don't forget your exports would rapidly rise.

  • You will create a lot of employment which will generate demand on at the same time.

  • It is an import substitution.

  • So I think this is one thing that they must do now last question on this.

  • In fact, exports are in terrible shape that contracting.

  • Have they done anything to change that in this budget was exploit exports being virtually ignored in this budget.

  • Well, the only thing that they have done is that they've said that all the taxes and duties that an exporter is spade that would be given back to him, including the state taxes that would be refunded electronica, Lee electron or digitally.

  • But I do hope that that happens very quickly because that's him.

  • Because you've got excellent taxes.

  • Right there is good, Ralph.

  • Thank you very much.

  • For, in short is not available.

  • Would you be available for privatization ministry?

  • Yeah, I think you could do something that I hope they do something about it on quickly.

  • Thank you very much.

  • Any competent people on their benches?

  • Like right, Right.

  • Right.

  • So, uh, just looking for harmony at imports and exports on, but the terrible shape you're in on that front.

  • Is that another area off worry in this budget?

  • Important Iris.

  • They've increased.

  • I think we'll get a case to talk about that specifically.

  • But that goes back to I think, the larger question that you were asking in terms off.

  • What is the vision and focus?

  • Are we headed in a direction that that is committed to privatization that is committed with an open economy?

  • Or we are we trying to do a balancing act between wanting to close our borders on some things and open them up?

  • One others?

  • And that is, You know, if you look at the economic Sylvia's well, and even the July economic survey, the vision for where Goethe is going to come from is definitely a vision off an export led economy and certainly a vision off an export led economy that strengthens manufacturing.

  • And yet when it comes to articulating what that would actually mean, we always fall short.

  • There are fundamental constraints that I don't think we have paid enough attention to, and I didn't see enough attention on that in the budget as well.

  • So I think this is definitely yet another.

  • It could be an ideological issue just like the Congress.

  • It's, I don't know.

  • I think that, you know, I think we have to.

  • I think it speaks or larger question in this budget, right?

  • Which is, you know, as a zone car said as well there is.

  • There we are at a particular moment on.

  • We have to have the ability to articulate a clear vision and a clear focus and then just move there and we haven't.

  • And the budget hasn't done that.

  • It's trying to do everything and then we decide.

  • Looking at the numbers you discover is probably not doing many of those things either.

  • So the absence of a clear, bold vision with with a carefully articulated plan and trying to do too many things at the same time inevitably leads you into this multiple poles and pressure that you have to negotiate and it requires political courage.

  • I don't know why that hasn't translated after all.

  • 303 and four years to go gives you the opportunity.

  • Yeah, we're joined now by some your country goulash and Neil can't.

  • Misha, thank you both very much for joining us.

  • Um, I'll ask you just to give us Ah very short key points you feel about this budget.

  • Your analysis.

  • Either one.

  • Neil can't mystery or you can start your anybody.

  • Don't feel shy.

  • Yep.

  • Uh huh.

  • I think that thank you did a couple of points regarding the budget, which I want to highlight four points, the first against their If you look into the budget numbers, the tax predictions look realistic because we're looking at around 8.7% growth, and that is much lower than the decay.

  • The elaborate affair, only 11 person.

  • The important thing is that if you look into the expenditure numbers, the capital expenditures shows an 18% jump, which is much higher than the 9% Dick Edell growth.

  • So there isn't push towards continuing capital expenditures.

  • Who has to pull out the economy?

  • However, a couple of more things which are positive in the budget.

  • The first thing is the increase in the deposit insurance cover from one leg to five legs with this inch increase.

  • Now, if you compare the ratio off the park, capita income off India and the insurance cover in the actually moves up the letter significantly.

  • The second positive thing in the body.

  • It is that the budget is actually significantly and as they export insurance cover for the banks, so it will make banks easier toe extend loans to the emissary under both the tree and the poor, ship and credit.

  • The third thing is that there isn't significant jump off.

  • I don't hope is 1000 crore on fundamental research of quantum, which could also be helpful to feel take and banks.

  • However, there are a couple of points in the budget which looks a little introspection.

  • For example, the first thing is that they moved toward certain taxation regime, very body you want actually feeling that if you want to forego the tax concessions that actually needs a little bit amount of research because as off now, India is a country where the Social Security cover is significantly on the lower side.

  • So I'm not sure whether that incentive to save needs to remain, because that is an important element in important household savings, because household savings has been big planning in the last couple of years.

  • And finally the other important thing is that if you look into the overall government borrowing program, a significant chunk off that is going to be mobilized to our small savings.

  • The total number is actually 2.4 lacquers.

  • So this means that the interest rates, specifically the bank deposit trips that are likely to score us a significant decline from the current levels because they're small, said they also compete with the small saving grits.

  • So overall, bottom line, there are some things before design hasn't done enough to get us out of our financial crisis that we're in.

  • I think there are some positive steps in the body, but some facility more of introspection that's spoken like a true Bengali.

  • All depends, But I think I think the points we made our very valid in the terms of the analysis thanks very much for joining us.

  • And let's hope those positive factors you mentioned do take, are implemented and do take effect.

  • Uh, you can't miss shop.

  • You're one of the brightest, and I know all your previous work in this area.

  • So what you're going to say we're all gonna take very seriously, So be careful.

  • Thank you.

  • Thank you.

  • That's it.

  • Very high, Mark.

  • See, I think a lot of the discussion tends to be about the the budget speech.

  • But I think the real Jews for and List Like me lies in the numbers on DDE.

  • The situation, I think, has allowed so well it was very tight going in tow.

  • The the budget.

  • If the economy is slowing down, your tax revenues tend to come down.

  • If you raise the fiscal deficit toe aggressively, you have a big problem with the transmission of interest rates anyway.

  • There is a problem right now where the FBI's cutting rage, but they're not getting transmitted.

  • And one of the key factors has bean that the spread between the government borrowing reads.

  • And the FBI said Ridge has bean too high.

  • If you had set of fiscal if the target, which was beyond their fire bm specified limits it, would randa risk off pushing up interest rates, borrowing rates, and that could have driven us into a very dangerous spider.

  • So what I think the budget does is puts forward some very credible numbers, unlike in any time in the last a couple of years, where the first reaction from everyone was that their tax growth numbers are not credible this time.

  • That is not a question that I think do you think the 200 black crows in this investment number is credible?

  • Disinvestment has never been more than 100.

  • Yes, so that's actually the yeah, So?

  • So that's That's the interesting part that even the next year, where the government is budgeting a 10% nominal GDP growth, the tax revenue growth numbers were indirect and direct.

  • Taxes are broadly the same ballpark.

  • So they're not expecting a significant improvement in compliance, which is, I think, mixed the numbers quite credible.

  • But instead the expenditure of GDP growth it exponentially GDP is still rising on DDE that is being funded by non tax revenue.

  • So this is actually something that's very interesting that in in a in a slowing economy, you need to tap into resources which are not about taxes, and there is an attempt to do that on.

  • I'll address that this investment question.

  • So there's 1.33 lakh crores that is coming in from the Telecom Ministry.

  • There is 2.1 lakh crores that is coming in from this investment out off, which, as the government specified, about 90,000 crores, they're saying will come from this takes their strategic nous investments in financial forms, which one assumes would include the the disinvestment in L.

  • I C.

  • So even if they sell 10% off L I see you know, we don't really have exact numbers and rice is very hard to value those things.

  • But I think those numbers those targets can be achieved.

  • That lets that that that that leaves about one lacked 20.

  • Given that many off the disinvestment from this year.

  • So the three that the government has already announced are most likely slipping into a fight.

  • 21 because I didn't know the government of India this cache county I think there is the 2.1 lakh crores If the l i.

  • C I.

  • P.

  • O happens is actually quite credible on the 1.33 lakh crores that is to come from the telecom sector.

  • It's not clear whether they're assuming off I d spectrum sale next year, or they are also assuming some idiot influence.

  • But either way, that number also if the fighting spectrum sale is handled carefully, is achievable.

  • What?

  • There's a lot of execution risking both these things, but I think it is far more prudent than assuming our tax revenue that you can't meet if they got me sling right.

  • That's a good point, actually.

  • Bouquets Brittany tells a bit about.

  • We were just discussing imports and exports and the customs.

  • I think that's between kind of not really highlighted what's happening to Customs data.

  • She didn't mention it in the speech, but you had a chance to look at it.

  • Surprisingly, about six or pages have bean devoted toe amendments in the customs regulations and host off products have seen a rise in the custom duty.

  • I was just trying to analyze what could be the possible reasons, and it's ah, cocktail of reasons.

  • It starts with the shell walnuts moving from 30% 100%.

  • Fortunately, the statue had been left out.

  • I don't know how Mr Trump is going to be pleased with this outcome.

  • Import a lot of walnuts from America.

  • Yeah, Mr Trump's coming soon.

  • Yeah.

  • Then there are the most serious note.

  • There are other products which seemed to be giving him practice to the local industry.

  • Footwear industry.

  • The you know, duties have gone up and then there are huge list of household products.

  • These are typically the products that the country imports from China, South Korea.

  • Kind of footwear interested?

  • It just is all Fort Wayne.

  • Sorry.

  • Footwear is not what we import.

  • The other set of products, which is ceramics, glassware, table where heaters household products.

  • Now, interestingly, they all have one off from 10 to 20%.

  • This has connection with the 10% import duty's gonna double 12% to 20%.

  • And all of these products would have got impacted hiding.

  • They're going ahead with the RCP.

  • So clearly we have gone into the regional.

  • That's right custom.

  • What the lady RCP works is that countries are cooperative, little comprehensive economic, basically all the Asian and Southeast Asian, that she's coming together in one kind of market.

  • You could never have gone from 10 to 20.

  • So countries are Frito have in their domestic tariffs higher rates.

  • And if you sign former for free trade agreement or an R C P agreement, they're automatically brought down.

  • Interestingly, they did another set off product.

  • Just just one second.

  • We'll just come back to that because very interesting to know how this is.

  • That wasn't highlighted earlier, but we've got I'm a top gun.

  • Onda Kieran was on the show with us.

  • Um, but everybody's really interested to hear what?

  • What both of you have to say.

  • Get him was in the shop.

  • Tell us your reaction to this budget at a time like we're facing the country, is facing the tough economic times.

  • So pretty, I think from a business sentiment point of view from a business confidence point of view, the budget has been very positively received by India ink because I think it started with the reduction in corporate tax.

  • Andi, off course today, the finance minister gave a lot of assurance to India ink that tax terrorism would be brought.

  • We would be done away with, you know, the whole aspect off, you know, allowing FBI's toe invest up to 15% incorporate borns.

  • You know, the sovereign funds which are going to now be allowed to invest in infrastructure projects with tax holiday and on many other such measures, are you know, they all go very well for investment on I think India ink, it least sees it very positively, including the abolition off the dividend distribution tax, which will certainly boost the bottom line and please the born markets.

  • But then on the other hand, I think this budget was meant to actually look at how to revive consumption, how to put money in the hands of the middle classes on how to basically get people to spend.

  • I don't think that has been achieved in this budget because, you know, the tax labs that have Bean announced our contingent upon giving up exemptions on that really doesn't make much of a difference.

  • I think that's quite putting more money in the hands off people.

  • Quite important to explain the time.

  • The second thing well, the tax rates have gone down is also I was just going to explain what you said just for the viewers that the tax rates that have gone down have not really gone down as much as they seem because earlier tax rate you're allowed exemptions to set off many items as exemption.

  • Now you have to take the lower it no exemptions, so it's not such a big drop.

  • Go carry on.

  • Yeah, and the second thing paranoid is that you know, it's all very well to, you know, shift their dividend distribution tax from the company to the shareholder, but I think that's not going to go down.

  • Well, because, you know, you're trying to basically put more money into the hands of the individual taxpayer on now you're actually going toe tax them on dividend received, which can be flown, going toe or go well for them.

  • And you're actually not putting money into their hands.

  • In fact, the tax they could play a tax of up to 42%.

  • Well, earlier on, they were paying half that.

  • Yes, exactly.

  • In fact, I think what is going to happen if I may just mention yes, please is that the government is actually going toe benefit out of doing that because they collect more tax on dividends.

  • Yes, yes, absolutely.

  • I see.

  • That's been, I think, quite an important impact.

  • Amita can't on the stock market dropping nearly 10,000 points.

  • 1000 points?

  • Yeah.

  • So I think you you have to give it another 3 to 4 days when the final print of the budget.

  • Yes, Eyes red.

  • And I think this, uh, I think this will correct itself in the next couple of days.

  • Yeah.

  • Never trust the stock market.

  • I agree.

  • It's not everything, and they're always compared.

  • I know.

  • We have people who have the stock market.

  • I think, Yeah, you know.

  • So I think the budget needs to be looked at, not from the perspective of the stock market.

  • Absolutely.

  • So, overall, one of the keys, my view.

  • So my my perspective is clear realization by the government that it's not the government alone which can drive growth on.

  • But if you look at the overarching team, it dwells very significantly on private public partnership.

  • One across sectors, you know, opening up district hospitals and PPP, which my mind is quite remarkable because we were facing a severe shortage of doctors on duh.

  • You know, pushing 450 private trains and railways on pushing for privatization off the railway stations on, I think putting Ah, hi.

  • Target on this investment.

  • Yep.

  • Government needs to get out of these areas and we recommend that B, p, c, l and Concho on.

  • I must say that every single recommendation which needy which works us there disinvestment commission has made has Bean actually accepted politically.

  • So we we will be making many more radical recommendations in the days to come on.

  • I think this is this clearly shows that government is pushing for private sector brownfield investments in the country.

  • And I think this is a good strategy because Greenfield investments take a long time.

  • They're risky, but these projects you already when you're selling roads when you're selling airport.

  • These are brownfield projects where revenue streams are already coming in, and therefore you will get private sector to come in on on the back off that you'll revive credit flow into these projects and the really challenge before they can I just ask you for the economy was to get credit flow back.

  • Can I just ask you your opinion on why the privatization target last year was 105 black crows and they ended up with only 65?

  • Like cross in there?

  • It was a huge white light.

  • This year we have to find thought.

  • This year we pushed for major major major companies.

  • I mean be PCL Concho, and there's some other big ticket disinvestment in line.

  • So I think what the government is the target they're pushed for is very much doable.

  • Why didn't know why did they not make it last year?

  • Why did they not make it lasted just out of interest.

  • You know, I think the process if you're doing it in a transparent, competitive manner, the processes take time, you know?

  • I mean, when you're selling government silver, you need to do it in a very transparent manners.

  • Yeah, unless you get criticism tomorrow.

  • So the processes take time, you know, appointment off transaction.

  • Let me tell you, be PCL and conquer their big ticket thing.

  • But it's even then it's taking time, right?

  • But I'm quite sure that next year you quite do it by feasible.

  • Well, I hope it's true, because a lot right on that 210 lack rose get him was on that show in terms of, uh, this hope that privatization will not fall short again.

  • That it all happened.

  • It's got to start right away.

  • And it's got to really move fast because doing this in 12 months 210 like Rose is no joke.

  • Do you think they'll do it?

  • So, you know, I want to just take off from where Mita just commented.

  • I think the hospital PPP project certainly is doable area because obviously it's like a brownfield project with, you know, private sector has to come in upgrade those hospitals and get it moving.

  • But I think my bigger concern is that these hospitals have to depend on government skins on.

  • Unfortunately, the reimbursement rates off government schemes is below cost.

  • And so therefore, I really worry about the viability off these hospitals that are going to be, you know, funded.

  • The other aspect is that I think the PPP model in in the real base is certainly very welcome.

  • And if that can be pursued and done speedily, I think that can take off on the force.

  • I think tha the investment that is being proposed in infrastructure eyes also going to be very crucial.

  • But one comment I want to make is that any green fields investment is goingto be gestational, and you're not going to see a quick payback for the next few years.

  • So I think we really need to rely on a lot off.

  • Quick winds on therefore brownfield projects, which are about P.

  • P.

  • P's disinvestment, has to be done very fast.

  • Those are the kind of things we really need to implementation is really the key in this whole thing.

  • Um, atop can't just one last question, too.

  • Was this budget done with the government understanding and recognizing that the economy is in a crisis.

  • Org.

  • In denial Where no Brenda, we must understand first, that the government clearly realizes that credit floor is a challenge on.

  • Therefore, it does several things you know outside the budget as well.

  • It decriminalizes a number off, you know, civil actions on outside the budget.

  • If you look at it, it's taken a series of measures to say that every bank loan cannot be termed as a fraud.

  • It's on.

  • Secondly, it's created a committee which will decide now before investigating agencies said it.

  • So I think the challenge right now is really get the animal spirits of the private sector out on Get the credit flow going.

  • That's really the key challenge, Correct.

  • But you didn't listen.

  • I just wanted to focus one.

  • Please go ahead.

  • I don't want to focus one key thing in the budget, which on that is the overwhelming focus on technology, artificial intelligence, much in learning quantum computing, and I think the huge push towards direct benefit transfer in many areas.

  • I think this is really getting technology across government and making a quantum jump.

  • Asparagus, India's concerned, and this will be really, really transformational in the years to come.

  • Good point.

  • Thank you.

  • Karen was in the show and Amitabh Kant thanks very much.

  • Oh, car.

  • The key point that Amitabh Kant was making that this credit flow problem and it's been a really crisis.

  • I mean, I I I felt was almost like a lemon.

  • Are we out of that?

  • Is this going to change that far from it?

  • Let me let let's take a very simple situation, Deke.

  • Uh, small or a mildly medium scale entrepreneur saying a place not far from here.

  • It's a Louisiana.

  • Okay.

  • And this guy gets an order for, say, 1/2 across in order that he hadn't hit her toe.

  • Got he's got this one.

  • The situation as off now is with that order.

  • When he goes to the bank and ask for an expansion in working capital in order to finance the order, it doesn't come the only way he will get some money.

  • Is it the books?

  • 12 to 14% in factoring against that order.

  • Okay.

  • This because the banks themselves escape.

  • Yeah.

  • They don't want to give money today.

  • One of the things it is not the lack of funds in the bank.

  • One of the things today is very simple across public sector bags and indeed, some pie.

  • Private sector backs, but certainly across proper public sector bags is I don't want my job doesn't go if I don't give credit.

  • But my job can certainly go if I give credit because someone could question that crate and it's become pervasive soon as very clearly explained that.

  • So it's a situation where I I actually because I serve on boards.

  • I did with a lot of people who are talking about the credit problems as distinct from being an economist, kind of talking about the world right and it is really a problem.

  • It's not just small, even medium, the only guys.

  • We're not having a credit problem of people who don't actually need the money.

  • Yeah, right.

  • Like water one in March in June 1920 2019 Public sector bankrate expended by 5% private sector by almost 25% public sector, but only 5% and public sector is a 70% of banking business.

  • Is that going to is this budget doing anything about that key problem?

  • Even Amitabh concept that is the key source of our slow down.

  • So I don't think it's doing enough for that.

  • Uh, what you Hi.

  • We had on the table for quite a while.

  • Eyes, the whole an area off reforms in the financial sector that would address some of these fundamental issues.

  • So one, for example, is that there is lack of competition within banking.

  • So, you know, we've given about to bank license is many, many years ago for more less, uh, over a decade around enough bank licenses that are being given.

  • And if we just finished the second is that even there is also a lack of competition to banking.

  • So you don't have a bond market.

  • You don't have a deep in liquid bond market.

  • Today.

  • We have a very pin corporate bond market, and we know what happened to the bond market when we had some turbulence and some problems.

  • The proposals are all there, so you know you need you need to set up a public that management agency have one born market which integrates corporate bonds and government bones.

  • You need to four banks.

  • You need to allow more entry, improved regulation, have a resolution authority so that in case there is failure, you know, another bank incoming.

  • Buy up these new banks that we will allow.

  • So there's a range of things that need to We don't know that need to be done on.

  • They will also once, even when they're done, it's going to take time.

  • It's not that the solutions will come in the next day number.

  • You know, the 66 sector inside out, and is there that fear factor about they don't card was talking about.

  • Absolutely So I think own cars absolutely right, and in fact, as the lows who touches on the fact that we have banks that have sufficient liquidity, some will say that it's that they don't see enough projects that are finance a ble.

  • But the real reason is the human factor.

  • Who is going to sign on that credit and live up to the harassment that may come 10 years later?

  • So it is good that we're seeing at least a step in the right direction.

  • As far as banks go, the desire to set up an advisory board whether that works or not only time will tell to whom these cases get referred so that every MP is not treated as a fraud that MPs are part off the growing up of an economy.

  • Andi, frankly, it's the same issue that hits us through the bureaucrats because there is the same fear off any decision taken on my biggest concern, which comes to my favorite subject disinvestment.

  • Been itching to come in on that.

  • I worked very much on the disinvestment programs under the watch My regime on I saw the brave decisions that are the bureaucrats at the time took aunt how many decisions little and big had to be taken on.

  • The minister himself stuck his neck out to get what really in fact, simple deals, you know, disinvestment of shares and Gail, disinvestment of shares and Wendy CDs with capital market transactions.

  • But even for that, how we would go around in circles to get approvals and signatures on In this current context, my heart goes out to the folks that have to sign off on these because actually, that is going to be the biggest impediment.

  • So the answer to your question can we achieve this 2.1 lakh crore of this investment?

  • Absolutely There.

  • Enough beautiful jewels there.

  • Fantastic that this government has put a P PCL out there as a potential sale.

  • Profitable, solid, wonderfully managed company that l I see in terms of shares sees disinvestment and dis investments than to be easier than privatizations.

  • However, the process of execution is not easier.

  • And I would say, if we can draw from the economic Soviet the right answer, maybe to set up a massive type structures which put assets into a fund where people who know how to manage money, who are brave enough to take these decisions, take it away from Well, hopefully they won't because some of it is pretty straightforward.

  • Selling equity is pretty straightforward, but you have to know.

  • But there's a market mechanism.

  • You have to be on Strobel to a reasonable set off deliverables, as against your job or whatever being at stake on dhe.

  • If

grieving.

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