Glimpse of Union Budget 2010& its impact on Business

Fiscal consolidation targets at Centre and States have shown positive effect on macroeconomic management of the economy. Proposal to introduce the Public Debt Management Agency of India Bill in thenext financial year. Direct Taxes Code (DTC) to be finaliz ed for enactment during 2011 -12. DTCproposed to be effective from April 1, 2012 Significant progress in establishing GST Network (GSTN), which will serve asIT infrastructure for introduction of GST Rs. 5,000 crore to be provided to SIDBI for refinancing incremental lending bybanks to these enterprises. Existing scheme of interest subvention of 1 per cent on housing loan further liberalised.

Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish to be the focus of attention this year. IncomeTax exemption limit raised to Rs. 1.80 lakh from Rs. 1.60 lakh . Exemption for senior citizens raised to Rs. 2.5 lakh. Tax under women slab unchanged. Tax exemption raised to Rs. 5 lakh for senior citizens of 80 years. To increase service tax on air travel. Excise and customs duty proposals to result in the net gain of Rs. 7,300 crore. Export duty rates on iron ore unified and kept at 20% ad valorem. Basic customs duty on agricultural machinery reduced to 4.5% from 5%. Basic customs duty on raw silk reduced from 30 to 5 per cent. Excise and customs duty proposals to result in the net gain of Rs. 7,300 cro re.

Old age pension to persons of over the age of 80 raised from Rs. 200 to Rs. 500 Allocation to education sector raised to Rs. 52,000 cr. Scholarship scheme for SC/ST students in classes iX,X. Plan allocations for health stepped -up by 20 per cent. Target of providing banking facilities to all 73,000 habitations having a populationof over 2,000 to be completed during 2011 -2012. Gross Tax receipts are estimated at Rs. ` 9,32,440 crore. Non-tax revenue receipts estimated at Rs. ` 1,25,435 crore. Central Excise Duty to be maintained at standard rate of 10 per cent. Standard rate of Service Tax retained at 10 per cent, while seeking a closer fitbetween present regime and its GST successor. GDP estimated growth at 8.6% in real terms. Food Inflation has declined by half, but still a matter of concern. Current account deficit is at 2009 -10 levels, and is a matter of concern. FII investment limit for infra corporate bonds hiked to $40 billion. Nabard capital base to be increased by infusing Rs. 10,000 cr. Banks asked to step up lending to agriculture. To liberalize FDI policy further. Economic growth in 2011 -12 likely to be 9 per cent. Govt committed to hold 51% in PSUs. Proposal to introduce scheme for refund of taxes paid on services used for exportof goods.

National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year.

Impact on Business

The budget proposes to move the service tax from cash basis to accrual basis. This implies that businesses will have to pay tax for the money that they have not received yet, due to which liquidity will become an issue. Finance Minister has proposed to provide Rs. 5,000 crore to SIDBI for refinancing incremental lending by banks to SMEs out of the shortfall of banks on priority sector lending targets. In view of the problems being faced by handloom weavers, inability to repay debts to handloom weaver cooperative societies which have become financially unviable, FM has proposed to provide Rs. 3,000 crore to NABARD. The initiative is expected to benefit 15,000 cooperative societies and about 3 lakh handloom weavers. These efforts could not bring a lot cheer to the sector as many concerns still remain. Discussions underway to further liberalise the FDI policy. This will promote fo reign Direct Investment in India. Amendments proposed to the Banking Regulation Act in the context of additional banking licences to private sector players. This will create more private players in in the banking industry. Basic Custom Duty reduced for various items to encourage domestic value addition vis--vis imports, to remove duty inversion and anomalies and to provide a level playing field to the domestic industry. To enhance flow of funds to infrastructure sector, the FII limit for investment in cor porate bonds issued in infrastructure sector being raised.

The Role of pressure groups in Indian politics in influencing Govt. decisions

Pressure groups have become a very important part of an administrative system. These groups try to pressurise the administrative and political system of a country either to ensure that their interests are promoted or to see that at least their interests are not relegated to the background. No system can function effectivelywithout taking their viewpoint into consideration. In developing countries like India where there is a scarcity of various resources on the one hand and acute poverty and deprivation on the other, the pressure on administrative system is bound to be very heavy.

Pressure groups are forms of organisations, which exert pressure on the political or administrative system of a country to extract benefits out of it and to advance their own interests. In the present contest these forms of organisations arebroadly referred to a$ Civil Societ y Organisations (CSO). In this unit we shall be examining their role as pressure groups. The term 'pressure group' refers to any interest group whose members because of their shared comtnon attributes make claims on the other groups and on the political pr ocess. They pursue their interests by organising themselves and by influencing the governmental policies. Their aim is to see that laws or government's actions are favourable to their interests. The capacity of a pressure group isdetermined by: a) Leadership b) Organisational abilities c) Mass media d) Economic power base e) Mobilisational techniques There is a need to discuss these factors to assess the potential of a pressure group and the way it is determined. .

Pressure groups are now considered as an indispensable and helpful element of the democratic process. The society has become highly complex and individuals cannotpursue their interests on their own. They need the support of other fellow beings in order to gain greater bargaining power; this gi ves rise to pressure groups based on common interests. For a long time these groups remained unnoticed, initially they were considered as harmful for the democratic process, but now their role in the political process has become very important. Democratic politics has to be politics through consultation, through negotiation and some amount of bargaining is also involved. Thus, it is very essential for the government to consult these organised groups at the time of policy formulation and implementation.

Pressure groups are primarily a consequence of inadequacies of the political parties. The political parties are expected to articulate the demands of different deprivedand dominant interests in the system. They are also expected to organize and mobiliz e the support structure to various demands. In India, the spectrum of political parties indicates that while all of them do talk of the poor and other deprived sections and give prominent place to their problems in their manifestoes, a larger number of them neither have the capacity nor the political will to organise the poor. Thus, the political parties leave a wide gap in the system. This gap is not filled by the pressure groups either. This is due to the inability of the poorer sections to organise themsel ves.