Monday, July 6, 2009

Overall A Break-Even Budget

It has been a long day of reviewing the budget by several individuals around India and the World. The Union Budget of India 2009-10 is in many ways playing through the traditional in-roads that have been established and taught in our Economics classes. I have been seeing lot of review of the budget and all seem to have given thumbs down for the budget except a few. Moreover, the media anchors who are supposed to be playing role of moderator when the guest comes seems to be fueling the problem by sedimenting a complete negative notion of the budget in the minds of the people.

Well if you ask me, I say the budget is fine balanced and in all sense it is a break even budget where there is no profit no loss in a literal sense. The budget covered several aspects of the economy considering the economic scenario. When I was listening to most of the comments people had to say, it gave me a complete notion that people are thinking only of their own benefit. I saw NDTV and was shocked to see Pranoy Roy who I have huge respect for seemed to be angered in every sense. But I would like to suggest all his guests and Pranoy who were speaking against the budget that most of you are not thinking from a Macro-Economic perspective. It's a complicated topic and area, but has almost a definite answer and 99.99% achievable solution.

First of all, a hue and cry why not disinvesting loss making sector by the government? All of you on TV screens were screaming money should be flowing in the economy so reduce taxes,allow private sector etc… But what about the people employed over there? During this recessionary period it is very important, to not dismiss people especially by the government. Because these people are having their jobs, they earn some income and this would be spent. Only then, expenditure of one becomes the income of another, and if you want government to sell off and give it to private sector who would implement firing of people who exceed the surplus requirement, then I would like an answer from all sitting and saying where would you give these people money? How can they spend when they don't have money? Where flow of money takes place in the economy? A coin has two sides. We have to look both the sides before giving a verdict simply against the government. So I give thumbs up for this move especially when the unemployment is around 6 % and not further aggravating the problem.

Secondly, disinvestment of 10 % is not enough? There is a common say in economics which says human wants are unlimited and always dissatisfied. Also there is another quote which we hear always,we have a problem with whatever is told or given. We have to understand the budget is now for these 9 months before the next one comes. Having said that, what is wrong with 10% disinvestment? In a way government is taking a bigger risk by losing 10% of profit making companies if it goes to private sector because they are losing the profits they can earn and use. I don't need to cite examples of private sectors profit oriented techniques that led to closure or insolvency of many companies and economic downturn round the world. This topic you look anyway can give you any argument. But I think its more than enough 10% disinvestment.

Thirdly, taxes are areas where government earns revenue and the corporate sector can't cry on not reducing the taxes or argue of perquisites being taxed. See for one thing, the corporate sector never pays the correct amount of tax to the government. They manipulate the books and accordingly pay the tax. If the government would get the tax that is lost through book rigging, I guess there would be substantial amount to fund many, many more schemes importantly. And when the government can't receive their revenue properly, why should they reduce the tax? Because whatever may come, the corporate sector has made sure they will continue to manipulate their books. So my suggestions are that corporate pay correct amount of taxes to the government and then only start blaming government. Until then, please maintain silence

Nextly, government expenditure on infrastructure is very important and a very good one. Because this again improves the standards in India on one hand and on the other ensures flow of money in the economy. When a country has good infrastructure there is chance of attracting others into the economy . There was a huge cry saying private sector has not got any chance of growth or they have been put aside. For a simple fact, the government is not going to be doing the infrastructure projects by themselves. They would call for tenders where all parties would be welcomed to participate and the best one would be selected. So please to all ignorant out there, remember not to forget the private sector has huge opportunity out there and if they do quality work, they would be rewarded.

And indirectly most of the people have problem of the governments stand on rural programs undertaken. People wearing suits on TV screens speak a lot of rural development, but in reality it's a complete lie. They don't care. They are interested in their sector and areas improving than the entire country. Most of the hosts and guests didn't say its bad, but they were using the phrase BUT, OR etc… it doesn't require rocket science to understand their displeasure. For once I see government doing something good for the rural people and I would be the first one to congratulate the government with all my heart if they implement it without any delay. If this becomes successful, we can say atleast the poor are not being poorer or not looked after. And for an award,atleast Congress is keeping upto the promise of the election to take care of the aam admi who elected them .

There are several more things I would like to add, but due to constraints I am not going to prolong it anymore. One thing we should understand that we should not compare the Economic Survey with the budget. That was just a survey giving its suggestions. If you say everything has to be implemented suggested by it, then I would like the corporate sector and the media to implement all the suggestions without any failure given by any of their employees. We have to understand there would be screening and different areas to consider before preparing the budget.

Moreover, budget is just a budget; there would be several other measures and reforms taken by the government in due course of time without just looking into the budget. For once, all out there, please keep confidence in Prime Minister Manmohan Singh for he has sufficient knowledge of what decisions are to be taken when the need comes. The government would keep on implementing several policies in the coming days and months.

Finally to all people who are blindly believing the media, a caution- they speak for their interest and for people who promote their shows. If not, they would have been able to protect your investments because they knew the economic downturn and which stocks are doing bad. Because most of us blindly follow them, they tried to pass on wrong information. This was recently exposed by Jon stewart of The daily show exposing and making Jim Cramer of CNBC come out and tell the truth on his show. Google it , you will find the videos and articles. I feel media should report like Jon Stewart.

TO all out there,if you look at an individual point of you, as an individual nothing much of benefit would be there. But atleast, start to be happy for the fact it is considered at aiming at reducing gap between the rich and poor. We always tell kids, to share and help others and support others to grow. If we are not going to stick to our words, then please don't tell all these lies.

Overall a break-even budeget. Further review in due course of time. So stay connected…

A Quick Glance at the Budget - Proposed tax changes in 2009/10 budget

India's finance minister on Monday proposed increasing the minimum alternate tax on firms, but scrapped a tax on commodity transactions.
Following are some of the proposed tax changes:

DIRECT TAXES


* No changes in corporate taxes
* Raises Minimum Alternate Tax (MAT) to 15 percent from 10 percent. The MAT was earlier introduced to make sure companies do not totally avoid taxation by claiming various deductions that cancelled out their tax liability altogether.
* Extends tax credit carry-over period under MAT to 10 years from seven years.
* Scraps Commodity Transaction Tax
* Scraps Fringe Benefit Tax
* Extends sunset clause on tax holidays for export profits by one year to 2010/11
* Tax holiday for natural gas production
* Increases personal income tax exemption to senior citizens by 15,000 rupees, by 10,000 rupees for others
* Elimiates 10 percent surcharge on personal income tax

INDIRECT TAXES

* Maintains overall structure of customs, excise duties and service tax
* Increases customs duty on gold bars to 200 rupees per 10 grams from 100 rupees per 10 grams
* Increases customs duty on other forms of gold, excluding jewellery, to 500 rupees per 10 grams from 250 rupees per 10 grams
* Restores 8 percent excise duty on manmade fibre and yarn
* Raises excise duty on several items to 8 percent from 4 percent, broadly exempting food items and medicines
* Exempts bio-diesel blended petrol, diesel from excise duty
* Cuts customs duty on bio-diesel to 2.5 percent fron 7.5 percent

NON-TAX REVENUES, REFORMS

* Intends to move to a system of direct subsidy transfer to farmers
* To set up panel to advise on a viable and sustainable fuel price policy
* To retain 51 percent government holding in state-run firms
* To encourage people's participation in stake sales in state-run firms
* State-run banks, insurance firms to remain with government, will be funded to grow
* Expects 497.50 billion rupees ($10.26 billion) from dividends, profits of state-run firms in 2009/10
* Targets 11.2 billion rupees from stake sales in 2009/10
* Expects 3G wireless spectrum auction to net 350 billion rupees in 2009/10

Sunday, July 5, 2009

FeDeReR Breaks Hearts of 2 Americans- Pete & Roddick


This post was published to faris at 11:55:21 PM 7/5/2009


On and on they held serve as the fifth set of the Wimbledon men’s final endured beyond all precedent. On and on, with shadows encroaching on the grass, Andy Roddick kept pace with Roger Federer on Centre Court as Federer attempted to close in on a record 15th Grand Slam singles title.
But as cruel as the concept began to seem as both players continued to invest in the outcome, Wimbledon’s latest epic had to finish. And as poignant as it should seem to those who know how long Roddick has been chasing sunlight in Federer’s shadow, Federer was the one who again ended up holding the trophy.
Roddick, in the midst of a resurgent season, had hoped to postpone Federer’s record-making, but despite playing what looked very much like the match of his life, Roddick could succeed only in turning Sunday’s final into Wimbledon’s latest classic as Federer won by the remarkable score of 5-7, 7-6 (6), 7-6 (5), 3-6, 16-14.
Roddick held his serve 37 times in a row before being broken in the last game. When Roddick’s last shot, a forehand, missed its target, Federer roared and walked to the net all alone in the record books after breaking his tie with Pete Sampras, who is now second on the career men’s list with 14 major singles titles.
“Sorry, Pete; I tried to hold him off,” Roddick said to Sampras, his American compatriot, who was sitting in the front row of the royal box after flying in from Los Angeles on Sunday morning.

Federer, who claimed a first French Open title last month, has now won Wimbledon six times, the US Open five times, the Australian Open three times and Roland Garros once.
Sampras was the last man to set a new mark in Grand Slams when he beat Pat Rafter in an emotional final at Wimbledon in 2000, and the American chose to return to the All England Club to witness Federer's achievement
The 37-year-old arrived to applause during the changeover after the third game and, with his wife, took his seat alongside Manuel Santana, Rod Laver, Bjorn Borg and Ilie Nastase.
With so many tennis greats on hand, Roddick appeared to be very much the support act as Federer attempted to make history, but the American has been a rejuvenated force this year and played one of his best ever matches in beating British hope Andy Murray in the semi-finals.
He went into the final having won just two of his previous 18 matches against Federer, but with the confidence of having arguably the world's best serve and a new variety to his game brought out by coach Larry Stefanki.
Both men started strongly on serve but it was the Swiss who put the pressure on first, forcing four break points in a tense game at 5-5.
GRAND SLAM TITLES
15 - Roger Federer
14 - Pete Sampras
12 - Roy Emerson
11 - Rod Laver
11 - Bjorn Borg
10 - Bill Tilden
8 - Ken Rosewall
8 - Ivan Lendl
8 - Andre Agassi
8 - Jimmy Connors
8 - Fred Perry


Federer was twice denied by Hawkeye, while Roddick saved two break points with trademark heavy serves, and the five-time champion was quickly made to regret the missed chances.
Moments later he was under pressure as he leaked a forehand into the tramlines to give Roddick a set point from seemingly nowhere, and when the Swiss made the same mistake in the following rally the American's supporters were on their feet applauding as their man took a shock lead.
The second set followed the same pattern, with neither player able to fashion a break point and Roddick now making 80% of his first serves.
It came down to a tie-break and, knowing his title hopes were under serious threat, Federer made a nervous forehand error to hand over the mini-break before the Roddick serve took over, sweeping the American to 6-2 and four set points.
An imperious Federer backhand and two service winners cut the deficit before Roddick had a chance on his own serve, but he put a high backhand volley well wide.
Federer fired a cross-court backhand pass to win a fifth straight point and earn a set point for himself, and Roddick pushed a backhand well over the baseline to bring Federer level at one-set all.
It was a body blow for the American and he headed straight to the locker room on the changeover before marching to the wrong end on his return to Centre Court.
Roddick's head cleared sufficiently for him to get a foothold in the third set and he saved a break point in game five with a serve.
The 26-year-old could win only two points on the Federer serve throughout the set but he forced another tie-break, and a chance to amend for the disaster of the second set.
A backhand approach into the net gave Federer the mini-break though and, although Roddick did well to close the gap to 6-5, the Swiss converted his third set point with a thumping forehand
If anyone thought that the smooth coronation of Federer was now back on track, Roddick had other ideas, playing a magnificent volley at 2-1 to earn two break points and taking the second with a backhand pass that Federer could not handle.
Roddick served out valiantly from 0-30 in game nine, thrilling the Centre Court crowd who were about to enjoy a fifth set that few had expected to see.
Federer had the first chance at a break in the decider but again Roddick served his way out of trouble, and the Swiss had still not broken his opponent after nearly three hours.
Both men appeared to be getting stronger and stronger and they were well and truly in the groove on serve, with Federer ahead in the ace count as the fifth set rolled on.
Roddick made his move at 8-8, firing a spectacular backhand winner down the line for 15-40, but five-time champion Federer responded magnificently with a service winner and a nerveless drive-volley.

The fifth set Sunday was by far the longest in a Grand Slam singles final in terms of games played, which is quite a statistic considering that Wimbledon began in 1877. The previous longest was in 1927, when René Lacoste of France beat Bill Tilden of the United States, 11-9, in the fifth set at the French championships.
But this year’s final certainly deserves a place on the shortlist of great Wimbledon matches.
The set became the longest in a men's singles final when Federer fired three aces in a row to move ahead 13-12, and Roddick began to look the more tired - but he refused to yield until the 30th game of the set.
The American looped a forehand long at deuce, and when he did the same on championship point Federer had his first service break of the day - and a historic victory after four hours and 17 minutes that takes him to the top of the Grand Slam list.
But there was some small consolation. The Centre Court crowd, accustomed to seeing Federer with the trophy, was in no mood to forget the man who finished second. The chants of “Ro-ger” were followed by chants of “Rodd-ick.”
Legends are legends, and performance is performance and from what we have witnessed here today was the highlight of how great the game has reached and yet I think we will have to hold on to our judegement regarding which is the best final we have seen recently because at the end of last year, it was last years final at Wimbledon, but after seeing today’s match, it will be this year for many. But, for me, I reserve my judgement after I see next years final. SO congratulations Roger Federer and commensurations Andy Roddick. I think we got to see the best tennis of the year and if Andy continues to play like this, he is surely in a league of champions who would have a say where the title would go at this years US Open.