So the Finance Budget is finally delivered. The stock markets cracked predictably. If you watch CNBC-TV18 and other business channels and listen to their anchors and the experts, you would well be forgiven to believe that the end of the world is nigh. Udayan Mukherjee, the Stocks editor on CNBC TV18, has been frothing in his mouth of anger against Chidambaram. One suspects that it has more to do with the tax that would be levied on ESOPs Udayan has received from TV18, than genuine concern for the Indian economy.
Its amazing to watch how selfish the Indian upper middle class and the rich have become. The mantra is more, more and more. All companies wants tax breaks (the honourable exception being Infosys), regardless of how much they are raking in. Equity investors have lost sight of the fact that they have already received significant largess from the F.M when he cut the capital gains tax to 0- if you invest inn equity for more than a year. If you are a trader- the tax is a measly 20%. But this has been conveniently forgotten and everyone's cribbing about the marginal dividend distribution tax that has been levied. Corporates have forgotten how corporate taxes have beeen reduced to very reasonable levels as have custom and excise duties.
Take Cement sectorr as an example. Cement companies are raking in the moolah at fabulous operating margins of 30 % or more. These companies are more or less monopolies in the region they operate in, and worse, their association is known to act like a cartel- while shamelessly advocating for more sops. Cement prices have increased from around Rs 135-140 to Rs 205-210 per 50 kg bag between December 2005 and May 2006 in the wholesale market and now ruling around the 240-250 levels in Mumbai. So prices have virtually doubled. But the fat cats in the cement industry continue to wail.
I can go on and on....no body seems to like that they haven't got that extra bar of chocolate, while the population which is living at the margins are fighting to survive. The fiscal allocations meant for them in the fields of education, water conservation, agriculture, health has been described snidely in the English Presss as 'Hand Outs', ' Preparation for the next election' and 'Dole'. While the fact that the F.M did not oblige the fat cats once again is being described with words like ' a lost opportunity','insipid budget' etc.
The greedy selfishness behind all this was, ironically, exposed by a well known and well respected analyst and fund manager- Sameer Arora who runs an India fund from Singapore. Sameer said that the finance minister has done nothing to damage growth which in any case is more or less assured, if corporates do what they are supposed to do and therefore its unreasonable to ask more. He advised the rest of the panelists to read the well known book -'Globalization and its discontents'- to become more aware about the realities of today's world around us.
I always had great respect for Mr. Arora as a analyst. But now, I must say, he is a equally good human being.