H.R. Vaish, Managing Director, Instapower Ltd speaks to Business Today's Associate Editor Shweta Punj on Budget expectations.
Q. Given the current challenges, what, in your opinion, would make for a good budget? What measures or proposals would you like to see?
A. Our inflation needs to come down, loans need to come down. We must head in the direction of being a debt-free country, like China. And not like the United States, in terms of debt. I would like to see measures specifically addressing the issues of inflation and debt. Industry can offset inflation by passing on the costs, but it's the common man who faces the brunt of it. Nobody seems to be looking into the debt issue. We have to reduce taxes, reduce government spending because it is only breeding inefficiency.
Q. Given the constraints the government faces in raising revenue, do you see a case to increase income tax rates on the rich?
A. We have tried high taxes and increasing taxes in the past and it has failed. Why make the same mistake? There was a time when we had taxes at around 40 per cent; customs duty was 100 per cent, and it was very difficult. You can't rob the rich to feed the poor. A bank sees the payment position of a company before sanctioning a loan. With higher taxes, aren't you stopping an enterprise from growing?
Q. If the budget does not meet expectations, do you fear that business sentiment would once again dip?
A. With elections about a year away, they (the government) will not do something to dampen the spirit. Anyway, industry is least affected by the budget, we will pass on any increase to the consumer. Ultimately it is the common man who suffers.
Q. Specific to your sector, what could the current budget do to improve conditions?
A. Currently, VAT rates vary between 12-14 per cent across India. For an energy efficient product, VAT should be 0 per cent. Government could give some sort of duty incentives. They have reduced excise for LED products, but this needs to be coupled with an input tax reduction for energy-efficient products.
Q. Which budget, in the recent past, do you remember as having been a good one?
A. I haven't seen one in a very long time. At least in the last eight to nine years we have not seen a really wow budget!