In Delhi, Business Leaders Greet Budget With Grumbles - NYTimes ...

They came dressed mournfully in dark blazers to watch the finance minister of India deliver the federal government budget for the forthcoming financial year.

For India?s corporate honchos, the annual budget announcement has in recent years not been a happy occasion. They have often felt politicians offer populist policies rather than economic reforms that would spur sagging growth and dipping investment in the country.

The interactive budget session hosted Friday morning at the New Delhi office of the Associated Chambers of Commerce and Industry of India, also known as Assocham, didn?t involve much interaction.

Heads of companies sunk into rows of chairs that curved in a semicircle in the conference room ? resembling a miniature corporate United Nations of sorts ? that faced two large screens onto which Finance Minister Pranab Mukherjee, speaking from the lower house of Parliament, was projected.

The business bigwigs patiently fixed their eyes on Mr. Mukherjee as he droned on about earmarked funds and infrastructure bonds. For the attention they paid, it could have been the World Cup cricket finals, except there were no euphoric cheers or claps. There was silence but for the occasional scratch of pencil on paper as attendees jotted down numbers Mr. Mukherjee proffered.

Sunil Kanoria, vice chairman of SREI Infrastructure Finance, furrowed his eyebrows through the two-hour budget speech. R. N. Dhoot, director of Videocon Industries, rested his chin on his knuckles as he watched the proceedings. News cameras snapped their grim faces for posterity.

?The life of a finance minister is not easy,? Mr. Mukherjee prefaced his tax policy by saying. A blanket tax for almost all services was introduced. The faces grew grave.

Finally, the speech concluded and Mr. Mukherjee?s voice and image suddenly disappeared.

?The budget is not very exciting,? summarized Anil K. Agarwal, president of the Cosmos Group trading house, succinctly. ?It?s just an exercise he has to do every year,? he said.

Grumbles from various executives in the conference room soon followed.

?There was nothing for the export sector.?

?Lackluster.?

?There?s not much for the capital market.?

?The emphasis was on agriculture.?

?It?s going to be a challenging year,? Mr. Kanoria said darkly. ?The budget is lacking a direction.? ?There?s nothing much to talk about,? he said.

The discussion concluded within a brisk 15 minutes. Executives trooped out of the conference room and were nabbed by television reporters in the hall waiting for soundbites.

Outside, on the lawns of Assocham, which is housed on Prithviraj Road, one of Delhi?s main thoroughfares, a buffet welcomed those who surfaced from the dreary meeting. Indian options, mostly, with a couple of Chinese dishes thrown in for good measure. One of the people on the buffet line asked a server to toss more pieces of meat into the orange gravy of the butter chicken. Business leaders ate standing, holding their plates on the sunny lawn.

?Considering this was the last chance to present a reform budget,? said K. C. Mehra, the corporate resident director of Shapoorji Pallonji Group, ?the budget, I thought, was a little pedestrian. It met all the basic needs. But there was nothing imaginative.?

Mr. Mehra, a former deputy managing director of Tata Steel, said more money should have been pumped into infrastructure. ?From a business point of view, whenever investing money, apart from social needs, one always looks at the return of investment,? he said, a canary yellow handkerchief peeking from his suit?s breast pocket. He noted that measures, which would help the government reach its goal of having 25 percent of gross domestic product come from manufacturing, have not been introduced.

Not everyone was glum about the budget though. Jyotirmoy Jain, head of banking and finance at Assocham, offered a more cheerful take. He said considering the political pressure on the federal government to please fractious allies in its coalition, it was still, said Mr. Jain, ?a good budget.?

?We as a Chamber,? he said, munching on slices of carrot and radish, ?we couldn?t have expected more than that. They had compulsions of raising revenue as well as relief for people affected by inflation.?

?On the whole, it?s not path-breaking but it?s a normal budget,? he added.

?Normal? although not a very inspiring word, was the most touted term in the afternoon.

?It?s a non-event. Almost,? said B.K. Sabharwal, executive director of Jaypee Capital, a trading house in currency futures and stocks. He noted that the budget has a provision for first-time investors wherein if 50,000 rupees, or about $1,000, is invested, half of that would be tax-free but locked in for a period of three years. ?That?s still a nonstarter,? he said.

Mr. Sabharwal, grumbling over a plate of vanilla ice cream, said that the service tax would also become more complicated with new services being subject to the tax. ?It?s neither a populist budget nor a reform oriented budget,? Mr. Sabharwal said, adding that the stock market is a good reflection of the budget. He scrolled through his Blackberry to check stock prices and then looked up.

?In the last ten years, for the first time, the market has not been affected,? he said.

The budget, like the butter chicken, might not have had enough meat for the bigwigs to swallow.

Source: http://india.blogs.nytimes.com/2012/03/16/in-delhi-business-leaders-greet-budget-with-grumbles/

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