'It is a very difficult inflationary budget'

Calling the Union Budget-2012 as a very difficult inflationary budget, Supreme Court of India Senior Advocate Feroze Andhyarujina said that there is a paradigm shift in this year’s budget in the form of introducing the Service Tax which would help in generating revenue in the long run. 

He was delivering the Late Ganesh Shenoy Memorial Lecture on the Tax implications of the Union Budget-2012, organised by the Institute of Chartered Accountants of India, Mangalore branch, in Mangalore on Saturday. 

He said, the budget which has been tabled at a juncture when the country is facing several crisis like slowdown in the growth rate of the economy, high inflation, rising interest rates and slow decision making process in the governance, should have stressed on the proper channelisation of agriculture sector and the petroleum products. Agriculture sector being the core sector of the Indian economy which has lot of potentiality for growth should have given more backing in the budget. So is the entrepreneur or the business sector.

The government which talks of supporting the entrepreneurs by providing them the subsidies, on the other hand burdens the entrepreneurs with high tax. According to a survey, India is in the 166th position out of 183 nations in starting new business. Procedural delays and other constraints are matter of concern while starting the business in India, he opined.

He added that the government should tactfully handle the disinvestment sector which would generate more money to the exchequer.

Speaking about the amendments that are made in the Direct and the Indirect Tax code, he said the amendments brought without proper thought, would send wrong signal to the foreign investors. Quoting the recent case where the Supreme Court announced the judgement in favour of the Vodafone which led to the government to bring amendment to the Direct Tax code, he said if the laws are not certain and changed irrelevantly, it would discourage the foreign investors to invest in India.

Earlier a panel discussion was held on India’s Balance sheet. Economic Commercial Laws Committee member Jayant Gokhale, Economic Research Centre Trustee G Giridhar Prabhu, Justice K S Hegde Institute of Management Professor G V Joshi were the part of panel discussion.