Business Today spoke to Rana Kapoor, MD and CEO, YES Bank, on steps he expects the finance minister to take in the Budget.
1. Rationalise Subsidy Burden: The total subsidy bill must be capped to a non negotiable 1.8 per cent of GDP. A focused approach by targeting cash-based transfers, phased deregulation of all petroleum-based products, and greater flexibility to states for implementation of centrally-sponsored schemes will act as key enablers.
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2. Create Plan Expenditure Synergies: In order to rationalise plan expenditure, it is critical to assimilate similar programmes under a common head. For instance, the National Food Security Act guarantees entitlement of nutritious food to pregnant and lactating women and children. A similar provision also exists under the 'Wheat based nutrition program' administered by the Ministry of Women and Child Development. Likewise, food security programmes are offered by different ministries, when encompassed under the PDS; offer significant scope for merger.
3. Augment Tax Buoyancy: The last two fiscal years saw plan expenditure bearing the burden of fiscal consolation. To renew growth, expenditure restraint needs to be accompanied by augmentation of tax buoyancy with an aim to increase tax-to-GDP ratio to 12 per cent by 2016/17 from 10 per cent via expansion of tax base, immediate implementation of the Direct Taxes Code and rollout of the GST.
4. Disinvestment of PSU Companies: A structure including a timeline as well as alternative investment routes must be formulated for PSU disinvestments. With sentiment in the equity market remaining conducive, I hope the target for disinvestment would be scaled up to Rs 50,000 crore vis-a-vis Rs 21,992 crore in 2013/14.
- AS TOLD TO SARIKA MALHOTRA