No move to check price rise: Speakers

The Union Budget 2011 was devoid of growth focus and lacked measures to check price rise and inflation, observed speakers at a discussion on the Union Budget organised by Coimbatore Capital Ltd and Coimbatore School of Business in the city on Tuesday.

“Overall, this is not a growth-oriented Budget. There has been no move to check price rise and it was doubtful whether the Budget will help control inflation,” observed K.Selvam, auditor.

The service sector has contributed the maximum to the country's GDP growth of 8.5 per cent while the agriculture and manufacturing sectors have not been showing much growth.

Disinvestment

While the government has proposed to raise about Rs.40,000 crore through disinvestment in public sector units, it remains to be seen whether the sum would be realised given the past experience.

There has been no major policy initiative towards debt management except for the announcement on the formation of an expenditure committee. The Budget appeared to be an exercise in matching revenue and expenditure, he said.

The imposition of one per cent Excise duty on 130 hitherto exempted items would lead to price rise, said D.Balasundaram, chairman, Coimbatore Capital Ltd.

Citing inflation, interest rates and foreign direct investments as three main factors impacting on the stock market, he said there was no proposal in the Budget to check price rise though Prime Minister Manmohan Singh has stated it was a cause for concern.

The imposition of service tax on diagnostic and hospital services would affect common people. Indications are that deficit financing and inflation would continue to rise, he said and advised investors to spread out their asset allocation.

Dwelling on the impact of the Budget on the stock market, S.Karthikeyan, Director, Coimbatore Capital Ltd., observed that it was “neutral” on a majority of the sectors.

He suggested investors could put their money in the stock market with a three to four years time frame. Short term investors, with one to two years outlook, could best avoid investing in the market, he said.

Ravi, Director, Coimbatore School of Business, made a presentation on the school during the event. The Hindu Business Line was the media partner of the event.

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