While welcoming the good news of the Finance Minister containing fiscal deficit at 4.8 percent, Bobby Parikh, managing partner, BMR Advisors, says today’s Vote on Account does not in any manner set the tone for FY14-15. It is infact the events after that, like the General Elections, that may move the market and shape the economy.Also read: FM pulls rabbit out of the hat for autos, cuts excise duty
Speaking to CNBC-TV18, Parikh adds that there is a lack of sentiment and fundamental strength to the Indian economy, thereby making the country a tough place to do business.
Below is the verbatim transcript of Bobby Parikh, BMR & Associates with Menaka Doshi and Senthil Chengalvarayan on CNBC-TV18.
Menaka: We had some tax cuts. There was this rumor going around that there might be some indirect tax cuts, the auto industry had been lobbying for them. What do you make of what we have seen so far in terms of indirect tax cuts and the fact the surcharges which were imposed last year on income tax all of them continue into the next year?
A: I think this is a three month or a four month kind of intervening phase that this is going to apply to. So, what is more interesting is to see what the main act is going to contain, that is a few months from now. If I take surcharge as an example, if it is life or death it should have gone, it was one year but it has been rolled over to June 30. Is that sort of fatal? Probably not. It should really be the remit of the new finance minister to decide what should happen with tax.
Menaka: You are pretending not to be amongst those 42800 people that were slapped with a Super Rich tax because you are quite okay with it continuing for another year.
A: Not one year, it can change potentially at June 30 when the new government comes.
Menaka: Has this finale Budget of the UPA government left you feeling anymore confident about the fiscal year that is to come or do you feel just about as pessimistic about it as you did for FY14?
A: I don’t think the Budget is doing anything to fundamentally – the goods parts are fiscal deficit where it came in or the current account deficit where it has come in. I think that was widely expected that he would be able to that and it is reassuring that he was able to do that notwithstanding some of the means that might have been applied to achieve that. However it was more important to achieve the target and to send that message of discipline as opposed to any quibbling about some of the details of it.
As to how 2014-15 is going to actually play out. I don’t think this Budget is fundamentally setting the tone for any of that to happen. There are just some expectations which are built into the revenue and the expenditure assumptions but where that is going to come from is something which is going to be more a function of what happens going forward rather than what is contained in this Budget.
Has the government done enough outside of the Budget to be able to lay the platform for the growth to happen? In bits really. I don’t see fundamental enthusiasm. If you interact with industry and with companies and large investors, it is fairly solemn - the mood.
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