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'Fine words from the finance minister have often contrasted with tardy implementation'

John Band

The belt tightening in the government sector is matched by the taxation of perquisites and the extension of tax net in the private sector

Two-wheelers have been given an eight per cent tax reduction. The CVS have enhanced tax write-down. And cars have protection against second-hand imports.

Tapping foreign markets through the ADR/GDR route will be much easier. Also, reduction in dividend tax makes equity investment more attractive. But the Budget is merely setting the macro scene. We need investor sentiment to improve, for the market to reach its full potential in funding India's growth.

Tax exemptions for processed food, made from fruit and vegetables, will be a major incentive to the food processing industry.

There are no new incentives for energy saving or similar efficiency initiatives, which is a shame, but not fundamental.

The power sector have not yet reacted as positively as it should. If the finance minister succeeds in carrying through the reform of the bankrupt SEBs and the end of theft, then the whole sector will enjoy a resurgence.

The objective of TDS is to ensure that all citizens pay their fair share of tax. Nobody likes it. But people who do pay tax don't like others getting away with not paying it. TDS tightens the net.

The Sensex cannot touch the 5000 mark until the future outlook for the world economy is clearer. This Budget is likely to move our trading range from 3900 to 4500 -- up a couple of hundred points -- but that's about the best

No, I think Indian pharma companies like Dr Reddy's Laboratories Ltd and Ranbaxy have done a much better job with R & D than people expected and the WTO regime actually makes them credible low-cost sub-contractors to MNCs.

Valuing IT stocks is difficult because you have to guess where they will be in three or four years. If you feel optimistic about a soft landing in the US, the IT stocks are cheap. If you think the world is headed for a melt-down, they are too expensive. Right now we like HCL Technologies and Satyam amongst the big ones

I've been following the Indian market full-time, since 1992, and fine words from the finance minister have often contrasted with a tardy implementation. This year is especially difficult. If he is serious about an exit policy, reform of the power sector and accelerated privatisation, this will turn out to have been an excellent Budget. But if Parliament spoils it, it will have been another waste of time.

John Band is the CEO of ASK-Raymond James, a Bombay-based financial services group

Budget 2001

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