Business Today's E Kumar Sharma spoke to Workhardt Group Founder Chairman & Group CEO Habil Khorakiwala ahead of Budget 2013 on his expectations from Finance Minister P Chidambaram. Excerpts -
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. One of the most important things we want to see, both for India and for investors worldwide, is a certain degree of stability and assurance that things will not change dramatically. There should be no surprises or unexpected changes, for instance, taxation measures that do not add much to revenue but create a negative sentiment. Any measure that is investment-friendly will be very positive. We need to become a more investment-friendly country - when investments come in, growth will follow.
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Q. Given the constraints the government faces in raising revenue, do you see a case to increase income tax rates on the rich?
A. It may be better to focus on measures that encourage more honest tax-paying rather than an increase in the tax rate or use of any short-term solution.
Q. If the budget does not meet expectations, do you fear that business sentiment would once again dip?
A. There are three dimensions here. One is the impact on existing business activity. This will go on and will remain unaffected. The second aspect is that of growth. This may get impacted. The third is about the kind of message that we will be sending out to the world - foreign direct investment (FDI) etc. This will have a far more negative impact.
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Q. Specific to your sector, what could the current budget do to improve conditions?
A. In pharma, companies investing in research and development should be encouraged. Measures such as the minimum alternate tax (MAT) should not be made applicable for that will negate all the benefits of any tax holiday. The focus should be to encourage and position India as the centre for innovation. That is where we have the edge over China with our frugal innovation. And, the government must increase spending on healthcare and reduce taxes on the sector so that more investments come in and prices of healthcare come down.
Q. Which budget, in the recent past, do you remember as having been a good one?
A. It would perhaps be the budget that Mr Chidambaram presented and one that everyone refers to as the "dream budget". Hope he announces another dream budget now.
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Q. Do you expect a business-friendly budget?
A. We should look for an India-friendly budget. By that I mean one that encourages growth and brings more investments into India.