Nagesh Alai, executive director, Group CFO and counsel for FCB-Ulka Group of Companies in India, was bombarded with readers' questions in an hour-long chat on Thursday. Alai handled each question with effortless ease while analysing this year's Budget.
Here is the transcript of the scintillating chat:
Nagesh Alai says, Good afternoon everyone. Like they technology fails at the right time. So.... I hope I am able to answer all your questions
nadeem asked, Hi What will be the impact on cement prices after this budget
Nagesh Alai answers, at 2007-03-01 14:02:51Nadeem, expectations are that they will stabilise and not run away
Joy asked, Will the 1 per cent extra cess for education have an adverse impact on your sector?
Nagesh Alai answers, yes, it will have an adverse impact across sectors, not just ours
vikram asked, can you pls enlighten us about the caluse where the Fm has put a service tax on renting out of immovable properties
Nagesh Alai answers, Vikram, essentially it says that premises rented out for business will be subject to service tax, not residential ones
Gaurav asked, What is your opinion about the Budget in general?
Nagesh Alai answers, Guavrav, I think the FM has managed to please diverse constituents and maintain some sort of a balance
Ramon asked, What are the prospects of the Indian ad agencies? Is it a good career option? What courses should I follow to get a placement among the top few?
Nagesh Alai answers, Ramon, with the Indian economy expected to do well, the ad industry is poised for growing exponentially. Hence prospects are good. Your educational qualifications and attitude will be a huge factor to get into the right ad companies
er asked, Please tell us something about FCB Ulka's marketing plans that are not confidential
Nagesh Alai answers, Well, we see ourselves as solution providers and out-of-the box thinking partners to our cients. So that will be at the core of our marketing plans
er asked, Did last year's Budget have anything beneficial for the ad industry?
Nagesh Alai answers, er, nothing specific was there for the ad industry last year
Suman asked, How does the Indian ad industry fare, compared to it's global counterparts?
Nagesh Alai answers, On profitability terms, the indian ad industry is better off. but soon with competition, revenues will be under pressure and costs will go up-hence maintaining profit growth will be a challenge
ab asked, The Budget did not have any good news for the media sector. Your Comment
Nagesh Alai answers, ab, you are right. but then not all can be pleased.
edr asked, Would more funds come in for the ad industry in the post-Budget period?
Nagesh Alai answers, edr, if the economy is growing, to sustain demand, ad outlays will have to increase.
ramendra asked, Helllo sir is this budget is going to affect car prices anyway?
Nagesh Alai answers, ramendra, no the car prices will not come down, there are no specific sops
Kamlesh asked, how you will rate this budget,How many point will you give to this budget on the scale of 10
Nagesh Alai answers, kamlesh, 5
ffdf asked, Can the ad industry anyway help the govt counter inflation? Any suggestion?
Nagesh Alai answers, yes of course, the ad industry can help - in terms of educating the masses about the macro factors which move the economy and what are the tangible steps that are being taken to control inflation
Krishna asked, The tax relief was increased by Rs. 10,000. Is that applicable only to women and senior citizens or to men as well. Does this mean, male tax assesses with a taxable income of Rs, 1,10,001 or more will be paying a tax?
Nagesh Alai answers, Krishna, the increased exemption of 10 k is applicable to all
raghav asked, how will the market move forward know..after the budget
Nagesh Alai answers, raghav, the market is expected to remain soft for some time.
sd asked, Why do you think Chidambaram went on defensive this year?
Nagesh Alai answers, sd, I dont think he was defensive. But, yes, you could detect the government's worry on prices. They have tried to tackle it in a small way by lowering duties on some and increasing exemption limit by 10K leading to some tax savings at lower end
snarayanan asked, why is the salary class always put into difficulty
Nagesh Alai answers, snarayanan, the salaried class is the easiest to control, so obvious!
Prasad asked, Budget has spoiled the sleep of many IT companies & BPOs...what say?
Nagesh Alai answers, Prasad, not really. Those who had started businessess in special zones will be subjet to MAT, not all - many have been paying taxes on their income
fff asked, Why does the Budget look so stale this time?
Nagesh Alai answers, fff, well there is a limit to creativity in matching numbers, you need to have revenues to meet expenses of running the country and looking after the deprived sections of the society
karan asked, Hi Sir, Good Afternoon, is there any change in Custom Duty in Heading 39 (Sub heading 3907 (Chemical).
Nagesh Alai answers, karan, no not to my knowledge
Ravi asked, Whats the impact on Bank interest rates especially Homeloans
Nagesh Alai answers, Ravi, home interest loans will only go up in the short term.
Rachel asked, In the long run, the internet advertising pie is going to be as big as IT and ITES and that is when they can be taxed. This way you're stunting the growth.
Nagesh Alai answers, Rachel, no. over time, things tend to get stabilised. the it and ites will continue to do well
Manoj asked, Sir, would you say that it is a political budget?
Nagesh Alai answers, manoj, all budgets are at one level politically driven. this is no different
MuraliK asked, Will Bank Cash Transaction Tax levied for withdrawals above Rs.50000/- from Rs.25000/- help curb IT evaders? Is black money being routed through banks? what's your view on this?
Nagesh Alai answers, Muralik, we cant fault the FM for the cash transaction tax. Many people use the banking system to avoid taxes. So lets not complaint
shane asked, hello sir,i'd lik to kno wl there be any effect on student's loan?
Nagesh Alai answers, Shane, the good thing is that interest paid on study loans borrowed by parents for theire children can be claimed as deduction. Very good step, in my opinion. Toff your hat to the FM for doing this.
eetregime asked, what is the ppf status w.r.t eee to eet
Nagesh Alai answers, eetregime, as of date the status on ppf is the same. but eee and eet is a conept whihc will eventually become a reality.
Rachel asked, There should be special schemes for Internet entrepreneurs introduced, because taking business online reduces costs and therefor prices substantially. This means lower prices for the end consumer and growth in GDP. The Internet industry should be exempt from Income tax for ten years.
Nagesh Alai answers, Rachel, everyone is asking for exemptions. Unless it is done judiciously, the country will not be able to raise resources. So the FM is doing his best. Finally one day all of us have to pay taxes and contribute to nation building. It is as much our responsibility.
amitkakde asked, Will this budget have any impact on real estate prices
Nagesh Alai answers, yes,amit kakde, prices will increase because of service tax.
Rahul asked, Is there any change in the rate of Excise duty on Iron & Steel ????
Nagesh Alai answers, rahul, not to my knowledge. across the FM has reduced the base customs rate on non agricultural to 10%
Manu asked, Sir, even though the exemption limit was hiked, the FM added extra cess. So ultimately will it affect our take-home salary?
Nagesh Alai answers, Manu, you are right. net net, for take home will be affected depending on the level of income.
coool asked, With this budget, what can we expect about the Infrastructure Sector in the Stock Market? Can we see any good growth in this sector?
Nagesh Alai answers, coool, infrastructure sector will continue to do well given the magnitude of unresolved situation on that front. India is a huge country so there is a huge scope.
Sugo asked, Is this budget really beneficial to the "Aam Admi" as the FM says.... if so in what sense? Will the soaring prices of essential commodities come down and help the common man meet ends, which has been a struggle in the last few months
Nagesh Alai answers, Sugo,
lets face it. The middle class is the most affected, but the FM does not have a magic wand. He is helping in his own way by addressing some macro issues and bringing prices down.
Sandeep asked, Sir, i belong to Education sector. So please tell me is this amount is sufficient for the development of contemporary education and research work.
Nagesh Alai answers, Sandeep, step by step. The larger problem is not he outlay for various sectors, but to ensure that the 100% of the outlays reach the end users. Today, there is a huge leak, it is no secret.
vora asked, are u c.a.
Nagesh Alai answers, vora, is that relevant to the disucssion.
Rachel asked, Nagesh, last year service tax was levied on the sale of space and time in 'other than print media' (which was covered already). This meant internet advertising also. I do think that Internet being the nascent industry it is should be exempt from service tax, if not both service and income tax. Can you do something about this?
Nagesh Alai answers, rachel, i think there has to be some sense of uniformity in taxes after the intitial breaks are given.
CHIDAMBARAM asked, PC , HERE , DONT BLAME MY BUDGET
Nagesh Alai answers, Sir, no one is. But the middle class is upset!~!
shantanu asked, every people will be affeted by the hike in LPG and kerosene prices. can't they be retained unchanged?
Nagesh Alai answers, shantanu, the government is as it is subsidising a huge amount on this front. So lets not complaint overly.
Shyam asked, Sir, what're the chances of bringing non-conventional energy into the excise net please ?
Nagesh Alai answers, Shyam, I think the government will be supportive of non conventional energy sources given the huge shortage in that area.
bobb12 asked, is there requirement of new pan card for trading
Nagesh Alai answers, bobb1, yes PAN will be an omnipresent requirement for all transactions.
Suzi asked, Why the threshold limit for men (110K) less than that of women (145K)?
Nagesh Alai answers, suzi, i suppose because men make women work more - unfair, is it not. So dont crib.
vinod asked, Please tell me about service tax, now service tax is 12.24% but what rate will from 01-04-2007.
Nagesh Alai answers, Vinod, it will be 12 % + 3% education cess + 12.36%
Sugo asked, The PM doesn't need to have a magic wand sir. The fact remains that only the salaried middle class people who form quite a large number of the population of this country still remain affected budget after budget after budget.... so no respite!
Nagesh Alai answers, sugo, my sympathies with you.
Anant asked, Its Really important !! I'd like to know the new rate for Education cess & how its applied. Thereby, the total new taxes rate applicable. Excise / Ed cess / vat... Thanks !
Nagesh Alai answers, Anant, on all taxes, whether direct or indirect, there will be an education cess of 3%. This is towards the literacy drive.
shanky asked, Nagesh, has the issue of SEZ's been wisely tackled in the budget......will we have uniformity in land allocation by the governments across India now?
Nagesh Alai answers, shanky, I dont think SEZ issue has been really addressed.
nirman asked, Sir, what r ur hobbies apart from budget ?
Nagesh Alai answers, getting into chat rooms with friends. does that help
nirman asked, nagesh, are u llb ?
Nagesh Alai answers, nirman, yes, also that
Rajesh asked, Sir, How do u rate this budjet for common man
Nagesh Alai answers, Rajesh, not upto the poor man's expectation
shanky asked, Nagesh, what should be a good investment option after this budget : stocks or real estate?
Nagesh Alai answers, shanky, in my opinion stocks will be a better option.
Rachel asked, Imported Dog and cat food is used by the rich and that has got an exemption while foodgrains consumed by humans continue to be expensive. This can happen only in India.
Nagesh Alai answers, Rachel, we are like this only!!
Divakar asked, What is the impact of budget on Home loans..?
Nagesh Alai answers, Diwakar, home loan interest rates will rise.
Rachel asked, Last year there was a 5000 crore plan for Mumbai announced for which a committee was to sit? What happened to that? This year again a similar announcement was made and by next year I'll give to 1 to 10 odds, NOTHING will happen on that front.
Nagesh Alai answers, Rachel, mumbai has been ignored for a long long time. I think the government is trying to do something about it now. You cannot keep the commercial capital out of the radar for too long
Nagesh Alai Budget asked, my question is rate of intrest of the bank loan is very high? why.
Nagesh Alai answers,
Suzi asked, hello sir, the budget should bring back the standard deduction for salaried class. Don't you think so?
Nagesh Alai answers, Suzi, the long term plan is to reduce tax rates and remove all exemmptions.
Priya asked, We all know farmers are very rich in our country, not the small farmers but the big farmers in punjab... why dont we tax them and help small industries rise
Nagesh Alai answers, Priya, agriculture is a holy cow, most politicians have their electoral base there. So dont expect agriculture to be taxed in a hurry.
abhishekkothari2 asked, the budget was good for agriculture & unemployed sector at large. but what about the concerning areas like sugar industry & cement industry?
Nagesh Alai answers, abhishek, what do you expect for sugar and cement industry?
ksaravanan asked, Is there any change in tax rebate on housing principal and interests amount compared to last year.
Nagesh Alai answers, sarvanan, no change on capital repayment and interest payment on housing loans. It remains the same.
Floyd asked, Service Tax on rental agreements of commercial property. That too will have the exemption limit of 4 Lakhs right?
Nagesh Alai answers, Floyd, good question. I think that argument will be used by all consultants.
Priya asked, Mr Alai, what is the govt going to do with the 1% tax they have levied on education
Nagesh Alai answers, Priya, the cess is 3% now and not 1%. The objective is to use it for education. Our literacy levels are abysmal. I only hope the collections reach the end beneficiaries.
nikhil asked, when onwards increased education cess i.e. @3% applicable
Nagesh Alai answers, Nikhil, it will be applicable when the bill is passed as an act.
rubal asked, HELLO SIR, DO YOU THINK THAT INFLATION WILL GO DOWN DUE TO AMENDMENTS IN THE NEW BUDGET? WHAT WILL BE THE EFFECT ON DOLLAR?
Nagesh Alai answers, rubal, i dont foresee a huge dip in inflation. In my opinion, dollar will continue to remain soft.
jain asked, I am chartered Accountant We have many manfacturing company my q is In budget education cess has been increasesd is a new edu.cess or increase on same by 1% many of my client its new name secondary higher education cess plz advise that that is two different type or similiar increase by 1% ( 2% to 3% ) or 2% charges and than 1% Charge
Nagesh Alai answers, jain, 3% on the base rate + surcharge.
Sai Prashant asked, I have a saving under 80C of about 50000 and also an home loan, inspite of all these i am still paying 40000 in taxes. How can i minimise these 40000 as taxes.
Nagesh Alai answers, Sai, look at investing upto Rs. 1 lakh under S.80C
RAJEEV asked, Dear Sir, is deduction u/s 80 D is seprate from sec 80CCC ( 1,00,000)investment?
Nagesh Alai answers, Rajeev, yes, S. 80 D deals with mediclaim policy.
pinakibee asked, what is the outlook for advertising industry, as far as this budget is concerned?
Nagesh Alai answers, pinakibee, the outlook is good for the ad industry, from a macro perspective. Budget is irrelevant in that context.
BiggBoss asked, Hi, What is your call for Centuary Textile Future? Bullisg or bearish?
Nagesh Alai answers, BiggBoss, am bullish on that stock.
Dinesh1972 asked, I asked about impact of budget on food grains? can you brief please.
Nagesh Alai answers, Dinesh, I dont see any benefits for food grains.
Nagesh Alai says, Good bye, folks. Sorry, I could not answer all questions, They were coming in droves and the time is short