‘There’ll be bottom up demand, jobs’

Is the Budget up to your expectations

The Budget is prudent and, thus, largely addresses the fiscal priorities of the government of reducing the deficit.

Do you think it will revive growth and investment and attract foreign direct investment Adhering to the fiscal consolidation path is a big positive and will enhance the confidence of investors and will attract foreign direct investment. The large investment in infrastructure, agriculture and social sector will help revive growth. Of course, this will depend on timely implementation.

As one of richest man in India, do you feel that the 15 per cent surcharge on those earning over Rs 1 crore is excessive How does this compare with taxes on the rich in the UK where your family members are settled Tax to gross domestic product ratio in India is one of the lowest in the world at 16.6 per cent as compared to 34 per cent in Organisation for Economic Co-operation and Development countries. The surcharge proposed therefore cannot be considered excessive but comparing it with taxes in the UK and other parts of the world may not be appropriate because of different taxation models.

Will the new tax regime and other measures for ease of doing business help to put corporate India back on its feet According to the Economic Survey, the country is facing twin balance sheet challenges: one on account of rising NPAs with banks and, two, deterioration of corporate earnings due to stalled projects.

With recapitalisation of banks proposed in the Budget, reviving the stalled projects, implementation of the bankruptcy code to make assets productive and massive investments in infrastructure and social sector should put corporates back on their feet.

Will the government’s focus on rural infrastructure development, increasing expenditure on the NREGA help revive demand, generate jobs It will generate bottom up demand, increase rural consumption and, therefore, create more jobs. Focus on roads and highways as envisaged in the Budget will result in immediate job creation and help the auto sector too which is manpower intensive.

Where has the Budget fallen short In spite of huge NRI contribution to the country’s economy — remittances of above $70 billion which is highest in the world, and significant contribution to the foreign exchange reserves by way of deposits with banks — the pre-budget representation they made to the government to consider their investments in industry and business on par with resident investments has not been given any consideration in the Budget. Additionally, the move to tax dividend above Rs 10 lakh would be a disincentive to promoters/investors.

Interview by Olga Tellis

Ashok P. Hinduja is chairman, the Hinduja Group