Talking about the chemical industry, Mr. Bharucha was of the opinion that the budget must not only address the basic woes of the chemical industry, it must also take measures to speed up economic growth.

According to him, the chemical industry is power and capital intensive and in both areas India stands at a substantial disadvantage in comparison to other countries of the world. Expressing helplessness and anguish Mr. Bharucha said, " If you tie-up one of our arms and ask us to compete globally, can we do it?"

His point is clearly borne out by the figures released by the Indian Chemical Manufacturers Association (ICMA). Power tariff in India costs 9 cents/kWh compared to 1.8 cents/kWh in South Africa, 3.80 cents/kWh in Poland, 3.90 cents/kWh in Canada, 4.0 cents/kWh in Chile, 4.20 cents/kWh in Australia, 4.3 cents/kWh in New Zealand and South Korea, 4.5 cents/kWh in Finland and 5 per cent in Norway and Taiwan.

Similarly average cost of funds in India stands at 15 per cent compared to 1.5 per cent in Japan, 2.5 per cent in Switzerland, 4.5 per cent in Sweden, 5 per cent in UK, 6 per cent in Europe and 9 per cent in USA.

Mr. Bharucha spoke about the inequitable situation, which had surfaced due to government's unimaginative method of levying anti-dumping duty. The government's action, he said, had led to a situation where it had become cheaper to import finished goods than to manufacture them after anti-dumping duty was levied on the raw materials required to manufacture them.

He cited examples of two key raw materials namely phenol and aniline, which are required to manufacture leather chemicals, pigments, dyestuff and rubber chemicals. Post the imposition of anti-dumping duty, total import duty on phenol has risen to 49.11 per cent and on aniline to 61.57 per cent. In contrast general import duty on leather chemicals has remained at 33.41 per cent and on pigments, dyestuff and rubber chemicals at 44.60 per cent. Mr. Bharucha feels that along with anti-dumping duty, import duty on finished products should also be raised adequately to remove this anomalous situation. He said in the final run, raw materials should attract lower import duty in comparison to finished products, if manufacturing of value added products was to be encouraged.

Talking about the overall economy Mr. Bharucha said growth in revenues was generally down, there was not adequate money supply in the market and therefore recoveries had become difficult. "Banks are now lending selectively", said Mr. Bharucha and added that smaller players in the chemical industry are finding it extremely difficult to manage their cash flows efficiently.

As a result of steep rise in crude, raw material prices had gone up and even though crude prices were down now, raw material prices are not likely to fall by similar margins. He said agrochemical companies across the country were doing bad business because of the "failure of the monsoon". He said only some parts of the country had received adequate rain. Rains in parts of Punjab, Kerala, Andhra Pradesh and Gujarat had been very erratic due to which farmers' produce was not selling. There was also a general problem of carry forward of stocks plaguing the farmers.

There has been a slowdown in the economy and industrial growth rate at 5.7 per cent in the first 9 months of the current fiscal was down by about 7 per cent in comparison to the corresponding period. Tariffs on customs and excise should be structured in such a fashion so as to boost manufacturing of value added products. He said India must learn from China where the size of manufacturing units is much larger leading to economies of scale, units are more backward integrated, productivity is higher, finance charges are lower and infrastructure like ports etc. is much better.

He said that the indirect tax structure had a cascading effect on costs and our infrastructure was appalling. " If we want to compete with the world, then we will have to be in par with others", and added that the budget will have to address these issues.

On another issue, he stressed on changing the labour laws Mr Bharucha said that labour laws in India needed complete revamping. " We have antiquated laws which are completely out of times", said Mr Bharucha and added that legal process was time consuming, which resulted in substantial delay in recovering dues.

Striking the final word he said, " Chemicals need more power and finance in comparison to others, which we do not have. We have had to contend with poor infrastructure in the form of railways, ports etc and there is a cascading effect of taxes on our costs. Therefore we need tariff protection."