The focus would, therefore, have to be on infrastructure. The government had several months ago stated that governmental expenditure will increase. This did not occur. This budget has not only to emphasise that it will increase but ensure that this happens. This may result in the fiscal deficit rising. This may, to an extent, be an imperative. The extent of the deficit can be contained by widening the tax net, reducing subsidies and by inviting foreign companies to develop the infrastructure.

Inviting foreigncompanies and multinationals to develop infrastructure is absolutely necessary as this will lead to a multi-pronged development initiative. With regard to roads, for example, a foreign company could be given a stretch of say a 100 kilometres or more to develop to exacting standards. They could be permitted to charge, after completion, a toll for 10 to 20 years to recoup their expenditure and earn a profit. This will, apart from giving employment, result in activity in the core sector.

Export growth after recording unbelievable growth rates is now negative. This is due to recession and the steep devaluation of south-east Asian currencies. There is a school of thought that argues that the Indian rupee must be devalued to make Indian goods competitive and place them on a level playing field. I do not agree with this. Devaluation cheapens the value of the currency forever and if we use this route there is no end. We have to compete on the basis of the quality of our exports. If we work on improving its qualityand make our exports outstanding, buyers will be prepared to pay a premium to buy Indian goods.

The incentive I think that may be workable is to permit companies that export deduct 15 per cent of the profits that they derive from exports from their other profits. Regarding 100 per cent export-oriented businesses, they could be given an incentive of up to 10 per cent of their net income (profits) as a grant provided that it is reinvested in the business.

India is a tourist's nightmare though as a country it has more to offer than any other on the face of the earth - beaches, mountains, palaces, lakes, snow-clad mountains, glaciers, raging rivers, forts and wildlife. Incentives must be given to both domestic and foreign companies to establish resorts like the ones in Bali, Malaysia and Thailand. Infrastructure such as airports and roads must be developed so that travelling within India becomes a pleasure not a hassle.

An attraction that could be introduced is cruises. At the moment there are cruises tothe Bahamas, the Caribbean and to the Mediterranean. We could have luxury cruise liners plying from Mumbai to Goa and onto Kochi (Cochin) and then the Maldives and back. At a later stage these could be extended to Mauritius and the Seychelles.

India has probably more palaces, forts and heritage sites than any other country in the world and it is a travesty that they are not looked after, as they should be. Taking cue from the manner in which parks are being maintained by corporates, companies should be encouraged to maintain heritage sites provided they have the resources to maintain them. As an incentive thy should be allowed a 150 per cent tax deduction on the expenditure they incur. Additionally if additional funds are required the companies may be permitted to levy reasonable admission fees. This will promote tourism and also ensure that sites are maintained well.

The budget must make provision for the support of local industries - especially agro-based ones. An example would be the raising of theimport duty on sugar and the levy of countervailing duty on the import of molasses. The budget should also reduce the subsidy on agriculture by at least Rs 4,000 crore. This money can be used for developing infrastructure.

In regard to excise duties, the slabs should be reduced - especially the duty on manufactured items in the core sector such as steel, cement and commercial vehicles. 100 per cent modified value added tax (Modvat) should also be restored and the scheme of maximum retail price (MRP) based assessments should be extended to more commodities as suggested by the Iyer Commission. Regarding taxes, the thrust of the budget will have to be to widen the tax net and in rationalising the structure. It is now mandatory for one to have a Permanent Account Number (PAN) and individuals must give the PAN to purchase or acquire assets/ services/ facilities. The budget should extend this requirement to the purchase of airline tickets, hotel rooms and other facilities. A requirement for employment must be thePAN as is in the United States. There a prospective employee must submit his Social Security number without which salaries cannot be paid. Additionally no person should be permitted to buy/ sell property or shares without submitting the PAN. In this regard the income tax authorities must ensure that all individuals who have applied for a PAN receive it within a month. I know of persons who have applied for a PAN over a year ago and are still awaiting the number. A notation on applications "Applied for" defeats the whole purpose of PAN numbers. Service tax was introduced earlier and covers some services. This should be extended to all service-providers including real estate agents, lawyers, clubs and others. This could result in bringing in as much as Rs 2,000 crore in revenues.

The Income Tax requirement now is that those who have a telephone connection or have an apartment (either leased or owned) over a certain square footage or owns a vehicle or have travelled abroad must file a return. This must beextended to the entire nation. Additionally no one should be permitted to open a bank account without a PAN. Corporation tax must be reduced. Personal taxation at 30 per cent is reasonable. However, with regard to the salaried employee there are some rationalisations that need to be made.

In regard to company provided accommodation, the employee is taxed 10 per cent of his basic and the excess rent paid over 60 per cent of his basic. This makes no sense. Companies provide accommodation to its employees out of necessity and because if they do not they will not be able to hire or transfer employees. Companies give landlords high deposits in order to keep the rent at 60 per cent of the employee's basic salary. Employees in company owned apartments have a distinct advantage, as there is no issue regarding 60 per cent of their basic. My budget recommendation is that the value of the perquisite should be 10 per cent of the rental value of the property or one per cent of the fair market value of theproperty.

Standard deduction is an anomaly. It is the same for the chief executive and his chauffeur. Standard deduction must be a percentage of an employee's salary. Additionally certain expenses required by an employee to maintain the position that he holds must be permitted as deductibles. There is inequity in the determination of the value of the car perquisite. The value is the same for a Maruti 800 and an Esteem; for an Opel Astra and a Mercedes. This is because the perquisite is based not on the value of a car but on its power. In my opinion, the perquisite should be one per cent of the tax value of the car.

Children whether you love them or hate them are an expense and this must be recognised. As opposed to a tax exemption limit there should be a three tiered exemption i.e., an exemption for a single person, an exemption for a married person and an additional exemption for a child (up to two children). This will be much fairer.

Finally, although there will be political criticism, agriculturalincome must be taxed. Agriculturists are among the richest persons in the country today. It is unfair not to tax him while the peon and the clerk are taxed.

Sinha's recommendations must be equitable and once approved it must be implemented swiftly and without undue delay. The budget has to be economically uplifting not politically motivated.