Bakul H. Dholakia

A decision support system to forecast cement demand

The Indian cement industry has experienced phenomenal growth in the last decade, following the decontrol of cement in 1989. The degree of competitiveness within the industry has increased significantly. The industry scenario is changing rapidly from an era of shortages to that of surplus. The future scenario for cement industry is likely to be characterized by growing competition, significant corporate thrust on modernization, changing pattern of demand and uncertainties regarding prices as well as growth of demand in a liberalized economy dominated by market forces. Under such dynamic conditions and changing economic environment, the task of forecasting the level and the pattern of demand for cement becomes very important for the industry planning at a macro-level as well as the corporate planning at the micro-level. A computer based Decision Support System (DSS) would provide the policy makers with the necessary flexibility to analyze and derive meaningful demand forecasts for cement. Central to our DSS is a model base which has a rich library of forecasting models based on Time Series and Econometric methodology. This DSS is being used by the officers in the planning department at the Cement Manufacturers Association. It is also serving as a permanent model with enough flexibility to incorporate annual variations in the relevant factors affecting cement demand to generate revised and updated estimates on a year to year basis.

Union Budget 2005–06: Promises and Prospects

The Union Budgets are traditionally surrounded by hype, debate, and controversies. This years Budget has been no different. Presented in the backdrop of favourable macro-economic conditions, a sound business environment, a booming capital market, and a relatively stable political scenario, it drew a lot of expectations from all quarters. This issues Colloquium is a post-mortem of the Budget, 2005–06 by an eminent panel of analysts. While highlighting the broad tenets of the Budget, they put across their views on the positives and the negatives and discuss their implications. The objectives of the Budget have been implicitly stated as being the same as the National Common Minimum Programme which broadly advocates the maintenance of growth rate of 7–8 per cent, promotion of investment, generation of employment, introduction of fiscal reform, stimulation of growth in agriculture, manufacturing, and infrastructure, and alleviation of poverty. The following positives emerged from the discussion: An explicit focus on the development of rural areas to reduce the pressure of migration to the urban areas. A clear roadmap for evolving a strategy for agricultural diversification. Incentives provided for strengthening the agriculture marketing infrastructure with a focus on agricultural credit, insurance, and micro finance. Dereservation of SSIs of 108 items and giving them the choice to pay excise duty for the first Rs.100 lakh and claim CENVAT or else remain outside the chain to help in integrating them into the value chain of production. A package of financial sector reforms including the removal of limits of SLR and CRR and facilitating the FII trading in derivatives. Substantial reliefs in the corporate tax and personal income-tax which should promote savings. Taxation of zero coupon bonds at 10 per cent of long-term capital gains. The panelists identify the following problem areas in the Budget: Lack of transparency in the revenue implications of the tax proposals. Injecting fresh equity and providing fresh loans to PSUs as this would mean a reversal of the reforms. Difficulty in achieving effective fiscal consolidation. Fringe benefit tax on service, facility or amenity provided by an employer to his employee. Internal contradictions in the policies related to the housing industry, small scale sector, VAT, and disinvestment. Overall, the panelists consider it a positive Budget in the sense that it would at least not disrupt the buoyancy of the economy. However, considering the opportunities that the overall environment offered, a more aggressive approach would have lifted the Indian economy further to help it emerge as yet another Asian Tiger.

Macroeconomic Analysis of Union Budget 1995-96

The Union Budget for 1996–97 was the maiden budget of the recently formed United Front Government. In this article, Bakul H Dholakia presents a broad macroeconomic analysis of the main proposals and provisions of this budget in the context of the stated objectives and examines the likely impact of the budget proposals on the Indian economy.The Union Budget for 1996-97 was the maiden budget of the recently formed United Front Government. Given the political context and the economic scenario, the formulation of this budget was a fairly difficult task. An attempt has been made in this paper to present a broad macroeconomic analysis of the main proposals and provisions of the Union Budget 1996-97 in the context of the stated objectives of the budget and examine the likely impact of the budget proposals on Indian economy. An attempt has also been made to present the post budget macroeconomic scenario for Indian economy for the year 1996-97.