Why India is moving in the right direction

Abu Dhabi - Khaleej Times, ICAI Abu Dhabi Chapter and IBPG dissect the pros and cons of Union Budget 2017

Top minds from the Indian business world gave their thumbs-up to India Union Budget 2017 presented by Finance Minister Arun Jaitley.
Experts gathered at the Abu Dhabi Global Market on Saturday as Khaleej Times and its partners - the Institute of Chartered Accountants of India (Abu Dhabi Chapter) and the Indian Business and Professional Group - cogitated the pros and cons of the Narendra Modi government's budget at a panel discussion entitled "Indian Budget 2017 - Managing the Future".
Leading the way was Indian Supreme Court advocate Homi Phiroze Ranina, who is a veteran figure at ICAI Chapter seminars and a chartered accountant himself. Others on the panel were Dr B.R. Shetty, founder and CEO of NMC Healthcare and chairman of UAE Exchange; Adeeb Ahamed, managing director of LuLu Financial Group; and Jimit Devani, director of Deloitte, Haskins & Sells LLP. Politician Shazia Ilmi was the moderator and - at times - did play the devil's advocate to perfection.
"Demonetisation was done with the best intention," Ranina said. Giving his full backing to the budget, Ranina, the visionary he is, said: "I am actually waiting for the next budget. The next budget before the general elections is going to be the most crucial one. Then [Jaitley] will announce a major reduction in income tax rates and give maximum concession."
This, he said, isn't about populist measures ahead of election but because "revenue will increase".
"The fiscal deficit will reduce further than 3.2 per cent but many incentives will be announced in 2018." So, there is doubt in his mind that all the proposals made in the budget will work for sure.
Elaborating, he said: "The delivery mechanism has been strengthened. Every single secretary of every department reports directly to the PMO. Modi had virtually converted the parliamentary form of government into a presidential one. The PMO has become most powerful body in New Delhi. They are monitoring all projects on daily basis. So, first time we are sure that tax-payers money will be properly spend."
He backed Modi's style of functioning and said: "He will emerge like the Lee Kuan Yew [the first prime minister of Singapore] of India. This country badly needs a strong, decisive leader."
Dr Shetty, in his unique style, said the Modi government exuded confidence in a businessman like him. He felt the investment climate has changed and now he was "confident" enough to invest in healthcare, education and infrastructure.
"I came to the UAE in search of job and now I am comfortably well-off. Now, it's time for me to give back," he said. Dr Shetty said he was building back in India a "government hospital free of cost for all citizens". The Abu Dhabi-based businessman also elaborated on other projects in the healthcare sector.
LuLu Financial Group managing director Adeeb Ahamed was more forthcoming in his analysis.
"This is a politically-correct budget and good for growth. Demonetisation will help in price correction. If we were to have growth across any sector in India, real estate prices have to be corrected and demonetisation is the first step towards that. This will lead way for more developments in the nation."
Ahamed noted more allocation in the agricultural sector: "It is needed if we want to be an independent and self-satisfying economy." Drawing a comparison between the Indian and Chinese economies, he said: "The Indian economy is a long-sustaining one as the conception happens inside. The Chinese economy has to take advantage of the international trade. It's an exporting economy." India, he said, has concentrated on increasing availability inside the economy. "This is a very positive move."
Jimit Devani lauded the "courage" shown by Jaitley to spell out the figures of a largely non-tax compliant society. Devani pointed out that only 1.5 per cent of the India pays tax. "Only 20 million Indians, that is, hardly 1.5 per cent of our population, pay tax. There is no way government will survive for long. If we look at others, for example Brics, it's better as seven to eight per cent of its population pay tax. Our tax-to-GDP ratio is 16 per cent and the Brics ratio is 20-30 per cent."
He pointed out the angle of fear in the minds of people.
"There is a fear psychosis among people. Even those who thought it was foolish to pay tax, has changed their ideology. Now the thought is 'let me pay some tax and live a peaceful life, because Modi is going to be there for long and he will not allow us to get away'. This psychological change is good for India."
- ashwani@khaleejtimes.com

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