Topic:          Post Budget Analysis (07-08)
Presenter:    Mr. N. Venkateswaran
Date:             02/03/2007
Venue:          IIPM Chennai

Budget: What the market wants

Mr. N. Venkateswaran is a professional with several qualifications: B.Sc., FCA, ACS, CAIIB, AMIMA etc. A Chartered Accountant and Financial Consultant by profession, he enlightened the students of IIPM Chennai by providing key insights on the impact of the budget in different sectors.

“Budget is just another balance sheet, a simple and powerful term of expression, highlighting the expenditure with respect to the revenue generated”, he said, kindling the thoughts of the students as an economist. The session’s spotlight was on the impact of budget in the IT sector, which has always been a profit making one for India after liberalization. He emphasized the fact that only Rs. 1, 72,730 crores was spent as planned expenditure against the budgeted expenditure of Rs. 5, 06, 767 crores in the fiscal year 2006-07. Contradictions of policy with respect to the excise duty hike in the cement industry also existed as per Mr. N. Venkateswaran, on the other hand there were clear indications that the government was creating favorable conditions to promote infrastructural development. Private corporate participation in the development of agriculture and education from his point of view described the inefficiency of government to control wasteful expenditure.

Active and enthusiastic participation from the students in the Q&A session paved the way for emerging issues requiring immediate attention from this year’s financial budget 07-08.  The lively session came to an end leaving different perceptions in the minds of the budding managers with respect to market requirements and realities confronting the union budget.

Paper Presentation in PRIMS, Periyar University, Salem

Since its incorporation (1973), IIPM has been an institution with privileged traditions, in the diversity of its fraternity, its global outlook and its world class research. Our incisive analysis with power-packed communication always sets us ahead of others. This was again proved when Periyar Institute of Management Studies (PRIMS), Periyar University, Salem organized a National Seminar on “Strategic Management: Opportunities and Challenges in the post LPG era”. The seminar was conducted on 15th & 16th of February, 2007 at their own campus in Salem. Corporate faculties, students and academicians presented more than 300 papers. Prof. R.Krishnan, Prof. Sandeep Kumar and Prof. Balamurali had sent their papers from IIPM Chennai. Prof. Krishnan and Prof. Kumar went to PRIMS for their respective paper presentations. Prof. R. Krishnan presented his paper on the topic – MIS becomes synonymous with "Misleading, Irrelevant Schizophrenia". He discussed how information overload is reducing the effectiveness of MIS today. Prof. Krishnan provided a 10 – Point Formula as a strategic prescription to overcome this ongoing problem in MIS. Prof. Kumar presented on the topic – The Great Indian Rural Market: Lure vs Battleground Realities. First, he presented the attractiveness of the Indian rural market. Prof. Kumar’s second half of the presentation focused on hard realities like poor infrastructure, lack of awareness and improper communication along with high competition. According to him, a better strategy in the post LPG era for the rural market should be a mix of rural marketing and social marketing strategies. Both the presentations were received very well by the audience. The question-answer sessions that followed the presentations were enriching too. The valedictory address delivered by Dr. R. Nandagopal, Director, PSG Institute of Management, Coimbatore brought the seminar to an end. But one thing was sure, amid the highs and lows of the two-day event, the IIPM presentations succeeded in communicating a class of its own that left a shining imprint in the minds of participants and the organizers.

“Humanizing the Union Budget 2007-08:Setting the House in Order”

The time has come when our honorable finance minister will perform the annual ritual of announcing the union budget 2007-08. The making of the union budget involves consideration of various vital issues. The E2 (Economics and Entrepreneurship) club at IIPM Chennai decided that this was the right time to organize a seminar on the same. The focus was to highlight these crucial issues which need prime attention in designing the union budget and to make everyone understand that development is not only about increasing GDP, burgeoning forex reserves, escalating FDIs and FIIs, but it is about reducing the population below the poverty line (better distribution of wealth), higher literacy rate (in terms of functional literacy) and enhanced infrastructure for all (at least a better sanitation facility).

On 10th of February, 2007 among the eminent speakers from academia and economics research who came to IIPM to air and share their views was Dr. V. B. Athreya, Programme Director – M. S. Swaminathan Research Foundation – the keynote speaker.  Prof. Sandeep Kumar (Chairperson - E2 Club) started off the session with an introductory lecture where he focused upon the issues related to problems of health, education and poverty. ‘How can the Ministry of Finance avoid the critical issues essential for the growth of a nation?’, he asked. He discussed various facts pertaining to these vital issues which need to be taken care of immediately for a better India.

The session became even more exciting and enriching when Dr. V.B. Athreya took over the dais. Dr. Athreya started his talk with an overall analysis of the union budget 2006-07. This helped us in understanding how to analyze a budget. Then he explained the effect of last year’s budget on health improvement, education sector and poverty reduction. He gave his recommendations also for this year’s upcoming budget. His recommendations have a focal intent of humanizing the budget i.e. making it work for a common man. He also emphasized upon the food security issues and improvements to be done in the agricultural sector. He highlighted that while services, manufacturing, industry and GDP recorded an annual growth rate of around 9 percent each in 2005-06, agriculture grew at a miserable 2.3%.  He stressed on the need for greater allocations for agriculture, rural development, education and health.

Dr. Athreya then pointed out how “corporate tax revenues and excise revenues have fallen well short of budget estimates by Rs. 7000 crores and 9,500 crores respectively” by a flawed taxation policy.  He called for a greater taxation of corporate incomes, restoring long-term capital gains tax on share transactions, elevating short-term capital gains tax to 20% as earlier, and recovering corporate dues to banks, among other measures.

While speaking about a lack of fiscal prudence and people’s welfare, he substantiated by enumerating the following points:

• Very limited allocations for agriculture
• No focus on tackling unemployment
• Obsession with the holy cow of fiscal deficit
• No serious attempt to address NCMP commitments

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