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BUDGET 2009--10

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hello smiley32.giffriendssmiley32.gif,

as we all know budget 2009--10 is coming on 16th Feb (Monday). So What You Think How it should be for Indian Auto Industry!!!!

or

What are Your smiley1.gifExpectationssmiley1.gif with this Pre Poll Budget!!!!!!

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With the economy in the4 dumps and elections round the corner I will expect the FM to go beyond the vote on accounts. At the moment fiscal/budgetary discipline is out of the window.

Expect tax sops, both direct and indirect. I will expect direct taxes to be cut, in order to accommodate the sixth pay commission. Also, excise on cars and the countervailing taxes on large engines may be reduced. There may be an acceleration in the time table for the GST. 

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Well i am expecting the acceleration in GST as sgiitk said, but with the financial crisis around globe which has already started affecting indian economy too,we might see changes in import duty's, direct taxes would be cut for sixth pay commission.

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" Mint's will be working overtime, busy printing note's" for all our inefficiencies...to make up for the 'big black hole' of a budgetary deficit. There will be 'largesse' distributed all round <as though it's coming from the ruling party coffer's>. It will be a budget which tries to 'appease' all classes. When even the US is doing this why not we... If we go on living like this we will sure be kaput and have to declare bankruptcy like many in the US are doing.

Advice: Save<don't invest>, hold on to the family jewel's < I mean the gold;silly>, hold on to the property. Car's would be the last thing on my mind. Mind you I'm a 'terribly' conservative Madrasi from the deep south, and we are not great consumer's. Have good medical/term and personal accident insurance. Secure your families future and then look to splurge. Rein in your expenses and keep a check on that plastic card, in your wallet that can lead to certain doom, if you use the revolving credit facility... and pay your taxes. Whew I think that cover's it all... that's my recipe for financial discipline in these trying time's.
Durango Dude2009-02-15 13:31:44

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Offtopic - but - the railway budget cut train fares by 2 % while petrol's come down by around 10 Rs/Liter (more than 15%)

So go for that long drive smiley1.gif

There might be some excise duty cuts which would marginally reduce tyre and battery prices.

What would be really cool would be if cars like the Reva (high input costs) that make a lot of ecological sense would be given a special tax break so that they can be priced competitively at alto/santro price levels.

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The budget makers are wary of the Election Commission and hence there were no sops or anything like that in respect of direct and indirect taxes. The report card of the past four and a half years was read out and allocations to various ministries/departments and sectors revealed. Essentially a "Vote on Account" to keep the money flowing in various sectors of the government and economy since the money flowage is expected to continue only till March 31st 2009.After that viz. 01/04/09 the "Vote on Account" helps the government to run and meet its expenses till a new budget is presented. The new government that takes over will present a full-fledged budget around mid-2009!

anjan_c20072009-02-16 13:55:42

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Chidambram would have been a better person to present this budget as he had been FM for a log time. Mukerjee was given the charge all of a sudden so could not be expected to do much in such a short time. And our Chief Economist - Prime Minister being indisposed, nothing more could have been expected.

 

Govt has been distributing poll largesse through out the year. Farmer's Loan waivers, Tax rate cuts and then various kind of doles to boost up sagging economy, so there was hardly anything left to give now. With a massive Fiscal deficit of 6% of GDP and tax collections down by 60,000/- crores than estimates, there is no money left for further doles.

 

Yes the budgetry gap will be madeup mostly by printing notes, so we can expect a big inflation after 6 months. So like Durango Dude says, it is best now to save and hang onto your assets.

 

One irony: Had the FM doled out more concessions, he would have been lambasted for presenting a pre poll populist budget. Not having done so - the budget is being labelled as 'disappointing budget'.

 

 

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yes on the point by akj53in  i can say this govt has already given a good gift to employees in the term of sixth pay commission

which whenever given to employees will be from First janaury 2006.

it directly means from class one to class four employees got a superb ammount in their accounts. according to an estimate a person whose salary is 30000 permonth will get approx 3 to 5 lakh.

but i positively think there will be a annoucement by govt very soon regarding the soaps to industry

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Pranab has spent all his energies fuming and fretting over the Paki's he has pretty less time for mundane thing's like a vote on account. After Manmohan's indisposal I think cabinet is in a tizzy; all the wrong department's with the wrong people, except, of course our Lallu Prasad Yadav.

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u r right . who can imagine the vision of lalu parsad yadav. many people says he is bihari or a lot of other comments. but in fact he has done a super job. from minus to 90,000 crore revenue in just five years is appreciating

 

Pranab has spent all his energies fuming and fretting over the Paki's he has pretty less time for mundane thing's like a vote on account. After Manmohan's indisposal I think cabinet is in a tizzy; all the wrong department's with the wrong people' date=' except, of course our Lallu Prasad Yadav.[/quote']

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Worshipping the false Gods !

 

Its high time the propaganda that Laloo turned around railways is bust and people get the facts right. There was NO turnaround of Indian Railways under Laloo. All he did was clever jugglery of the funds in railways. For example, 9000 crore pension fund was included in the railway profits which by no means was from additional revenues and cant be invested for railway operations or expansion.

 

Care to know the truth behind how Indian Railways made huge "profits" under Laloo Raj ? Please read below the findings by Outlook after interviewing ex-members of Railway Board and IIM professor in issue published in Oct 24,2007

 

Please read it fully to understand how 21000+ crore profit was 'made'.

 

-----------------------------------------------------------------------------------------

 

Introduction: Not all is profit in the Rs 21,578 crore Laloo tom-tommed last year

One year back, they were scripting the story of the "great Indian Railway turnaround". Upbeat babus, led by their mantri-messiah Laloo Prasad Yadav, went to town proclaiming how they got Indian Railways chugging, sparing no forum to tom-tom how it would mop up profits surpassing those of top public sector earner ONGC.

Compared to that buzz, things are unusually quiet for 2007-08. No tall projections this time, no talk of bettering last fiscal's Rs 21,578 crore profit. Rs 21,578 crore? Amazing as it sounded then, Railway Board members now confirm that much of Laloo's success story was more hype than substance. As one official put it, "The turnaround is probably one-third true, one-third well-orchestrated publicity, one-third jugglery of figures."

Always clever with words, Laloo seems to have shown skill with numbers too. A close scrutiny of the account books reveals the net investible surplus of the railways at Rs 11,000 crore-almost half of what's been touted as profits. Even this money has been earned at the expense of passengers and at risk to their safety.

Confirming as much, R.R. Jaruhar, till recently Railway Board member (engineering) and part of Team Laloo, says, "Things have been presented lopsidedly. Growth is a process of continuity, it cannot leapfrog. All this is accounting jugglery." Citing examples, he says, "A large amount of money being shown as profit is not available to be ploughed back.

It's not investible surplus. Part of it is the suspense account: money promised to the railways but not yet given to it." This, conventionally, is not profit.

Not just that, the railway pension fund-which accounts for Rs 9,000 crore of the Rs 21,578 crore profit-was shown as cash surplus when it was money the railways can't invest. Says former railway finance commissioner S. Murali: "The railways are now displaying all their wealth in its full glory. But then it's not fair to compare with previous years, unless you put those accounts in a similar format." Adds Vijaylakshmi Vishwanathan, another former railway finance commissioner, "The railways under Laloo has altered the way the balance-sheet is presented. It has resulted in the revenues getting inflated artificially."

The creative accounting did not stop here. Making up the Rs 21,578 crore was:

* The Rs 850 crore safety surcharge on passenger fares and other receipts was shown as profits under miscellaneous receipts that amount to Rs 2,500 crore. Incidentally, the safety surcharge was to be levied only till March 2007. The railways converted it to a development surcharge without cabinet approval.

* Rs 1,700 crore due to the Indian Railway Finance Commission as dividend for lease of wagons;

* The Rs 550 crore licence fee for running container trains (returnable in case the operator wishes to withdraw).

* Just before the end of '06-07 fiscal, the railways announced that tickets could be reserved 90 days in advance instead of 60 days. Thus an additional Rs 550 crore was added as advance earnings for the next fiscal but included in '06-07 balance-sheet.

But what about actual earnings? Here, the railways primarily did two things: substantially increased the load carried by freight trains and put in place a slew of ticketing rules which extracted money from passengers even as Laloo claimed he had not raised fares.

A chunk of the extra earnings-Rs 5,000 crore-came by increasing the carrying capacity of container wagons by an additional 10 tonnes each. The wagons were anyway being overloaded; corrupt officials pocketed the money which should have come to the railways. Laloo just decided to make it official, offering another of his rustic gems, "If you don't milk the cow fully, it will fall sick."

However, it was a practice experts had questioned repeatedly on grounds of safety. The rail infrastructure-tracks, bridges, wagons and locos-they pointed out, can be stretched only to a limit. While additional load was being carried, maintenance schedules were altered, compromising safety norms to allow more running time to trains. The frequency of train examination and maintenance too was changed. Earlier, train examination was done every time a train came back to its base station, irrespective of the distance travelled in the interim. The railways started carrying out this exercise after every 7,500 km.

As expected, various zonal divisions started reporting increased rail fractures, stress on old bridges and wagon coupler failures due to increased axle load and less frequent maintenance.

Accessing some internal correspondence between the various zonal offices and Rail Bhavan, Outlook has come to know the following:

* The East Coast Railway reported a 42 per cent increase in rail fractures, increased instances of wheel slipping and stalling, increase in 'sick detachment' (wagons needing repairs), and failure of important equipment in electric locos.

* The Southeastern Railway reported increased en route detachment due to wagon body bulging, stalling and wheel burns, and vulnerability of a large number of bridges.

* Southern Railway reported increase in spring failures and brake beam defects, and in overall sick marking.

* South Central Railway pointed out stalling of wagons carrying load above their capacity, and also increased rail and weld fractures. These were the very concerns experts had voiced when the railways decided to increase the axle load without any trials and without the requisite approval of then chief commissioner railway safety (CCRS) G.P. Garg.

Recently retired from the post, Garg spoke extensively to Outlook. "As the CCRS," he told us, "I raised objections. The railway bridges are old, hundreds of them needing rehabilitation. The railways wanted to run trains with an increased axle load without any checks, tests or technical analysis. I told them not to take ad hoc decisions but to fulfil the conditions laid down for increasing axle load." According to him, the tracks, the wagons, locomotives and even the wheels needed to be tested for impact of additional loading. And if the railways under Laloo could increase the axle load it was only because infrastructure renewal work had been done before he took over, says Garg.

His predecessor Nitish Kumar had created a non-lapsable Rs 17,000 crore corpus, the Special Railway Safety Fund, and large-scale renewals had been accomplished in terms of tracks, signalling, coaches and locomotives.

To get over the CCRS objections, the Rail Board officials, including Laloo's OSDSudhir Kumar-apparently the mastermind of the turnaround-assured the commission that they were increasing axle load only on an experimental basis and would fulfil all requisite conditions. The railways are now running higher axle load on almost all routes, but "fulfilling of conditions", that's another story.

And remember the IIM-Ahmedabad study that first gave a stamp of credibility to Laloo's turnaround? Professor G. Raghuraman, author of the much-touted report that the railways commissioned for Rs 4 lakh, now tells us how that came to pass. "Additional revenue came from improving the turnaround time of wagons and carrying additional load," he concedes. But this growth is unsustainable, he adds. "The railways has taken full advantage of carrying extra load. There can only be a one-time increase with the same asset. Investment has to be made in

asset improvement and upgradation," he says. Far from that, the turnaround has contributed nothing to passengers in terms of improvement in amenities and facilities.

The IIM study did make Laloo the man of the moment. So much so, visiting students from the Harvard Business School, Wharton and MIT were queuing up to study the miracle he had wrought. Or so it was projected. Now it seems that the visit by the students of the Harvard Business School in December 2006 was not to study any railway turnaround; they had merely

called on the rail minister as part of their Camp India programme. Outlook contacted Seth Cohen, one of those students who had attended Camp India. He had this to say: "The visit was informal," he said, "arranged by our Indian hosts. It was not connected to any academic project." Ditto the MIT students toasted and hosted by Laloo.They came to India during their spring break in April 2007; the railways was another diversion during their eight-day break.

So, was the Laloo Express a passenger train all along? The minister does deserve some credit, though not the kind he managed to attract. Juggling numbers is high art for sure, but it doesn't always make sound commerce.

--------------------------------------------------------------------------------------------------------------------------

Laloopalooza: The Great Sleight Of Hand

Author:

Publication: Outlook

Date: September 24, 2007

URL:

http://www.outlookindia.com/full.asp?fodname=20070924&fname=Railways+%28F%29&sid=1

Laloo has been claiming that the railways made a profit of Rs 21,578

crore in 2006-07. But the actual figure was Rs 11,000 crore. Here's the

secret of Laloo's added profits:

* Rs 9,000 crore pension funds shown as cash surplus

* Miscellaneous funds-Rs 2,500 crore-included in earnings

* Rs 1,700 crore due to the Indian Railway Finance Commission as

dividend for lease of wagons put in the profit account

* Profits shored up by showing advance earnings for 2007-2008 in last

year's balance-sheet

* Monies in the suspense account-funds promised but not yet

transferred-reflected in the earnings/profits

* Tonnage carried by freight trains raised despite repeated objections

and safety concerns. This brought in Rs 5,000 crore.

* Hidden costs to passenger tickets earned the railways Rs 325 crore 

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