Speakers at the Business Line Budget Talk on Saturday expressed the opinion that Budget needed better pragmatism.

Mr Ananthakrishna, Chairman of Karnataka Bank Ltd, who spoke on the impact of the Budget on the banking industry , said the projected 5.1 per cent fiscal deficit figure for 2012-13 will have direct bearing on the profitability of banks and money supply to public and the economy.

To meet the deficit, the Government will borrow money from banks. Any borrowing programme of the Government will have an impact on interest rates and SLR of banks.

This will lead to less or more money supply, he said. This, in turn will impact the profitability of banks and money supply to public.

Expressing hope that 5.1 per cent fiscal deficit is achievable, he said the Finance Minister is showing tree top to end up on tree top. In some cases, people are shown the moon and end up on tree top. The case is not like that here, he said.

He opined that the Budget could have contained and curtailed non-plan expenditure. The additional three per cent interest subvention to farmers, who are prompt in repayment, will improve the repayment culture among borrowers. However, that subvention is not there for private sector banks, he said.

EXIM

Analysing the implications of Budget on export-import sector, Mr Walter D'Souza, Chairman of Federation of Indian Export Organisations (Southern Region), said the Budget needed better pragmatism.

He said the concession on cold chain facilities in the Budget will help backward integration and strengthen supply chain of food products for export.

Reduction of custom duty on certain textile machinery will help counter competition from Bangladesh, Pakistan, Sri Lanka, and Vietnam.

However, he expressed concern over no fixed time frame for the introduction of GST regime.

Referring to the high trade deficit during the current financial year, he said it is high time that the Union Government takes a clear-cut policy on this. Mr Murali Mohan, Chairman of the Mangalore branch of Institute of Chartered Accountants of India, said the move to increase individual tax exemption limit by Rs 20,000 is aimed at creating more middle class people for the growth of the economy.

On the deduction of up to Rs 5,000 for preventive health check-up, he said most people who have mediclaim facility would have exhausted it.

The Rajiv Gandhi equity scheme for new retail investors looked like the last minute exercise, as it is not mentioned in the Finance Act, he said.

Dr M.S. Moodithaya, Director of Nitte Global Initiatives, moderated the session and also delivered the concluding remarks.

Business Line Budget Talk was sponsored by Corporation Bank. The Saffron at GHS Road in Mangalore was the hospitality partner of the event.
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