India Inc believes that given the current economic slowdown, it could not have been any better
Kumar Birla
Chairman, Aditya Birla Group
The Finance Minister has managed to present a Budget which combines growth focus with fiscal consolidation. The former has been achieved by giving a boost to consumption spending through lower taxes as well as increased rural spending. The latter has been achieved with some expenditure control, some increase in excise duties and by widening the tax net. The commitment to move away from bond financing to meet oil and fertiliser subsidy shortfalls is welcome, as it provides better financial transparency. The minister has also continued with and enhanced the inclusive growth agenda through measures aimed at providing employment, housing and food security. The proposal to allow more private banks will contribute to financial inclusion.
Sunil Mittal
Chairman, Bharti Group
The FM has chosen a calibrated approach on rollback of economic stimulus with a marginal increase in excise duty from 8 per cent to 10 per cent, but retained the service tax rate of 10 per cent. A bold disinvestment agenda is a welcome step, coupled with continued investments in infrastructure, particularly in the areas of road, rail transport and energy, and enhanced outlays for education, health and rural development. I expect clear dividends both in terms of reach and impact of the government’s flagship programmes. The FM’s move to aggressively rationalise income tax slabs will put more money in the hands of the middle class and provide a major boost to domestic consumption. Overall, a very growth-oriented Budget.
Chanda Kochhar
MD & CEO, ICICI Bank
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The Budget will provide fresh impetus to investment and consumption demand in the economy and promote infrastructure development on a larger scale. The focus is on supporting the growth momentum of the economy and addressing long-term constraints to growth. Further, the renewed focus on fiscal consolidation in light of economic recovery augurs well for the economy over the long term. The Budget presents a balanced approach towards long-term economic planning and short-term considerations of sustaining and broad-basing the momentum in economic recovery. The movement towards better fiscal management and transparency will increase efficiency in the economy.
Kris Gopalakrishnan
MD, Infosys
This Budget signals continuity of reforms and is very good in the medium to long term. While the fiscal deficit is being brought down and the GDP growth has gone up, the increase in excise duty on crude oil and petroleum products is a cause for concern, which could trigger inflation. For the IT industry, investment in infrastructure and eGovernance could generate potential opportunities. Also, IT industry employees will see a higher take-home salary figure. The factors that will affect the industry are the increase in the minimum alternate tax (18 per cent) and non-extension of the STPI scheme for small and medium enterprises. Overall, this Budget is more than satisfactory, and I would rate it at 7 out of 10.
A M Naik
Chairman, L&T
The Budget reflects the growth story of the Indian economy. The stance has been reformist. It has successfully contained the fiscal deficit at 5.5 per cent and has managed to contain government expenditure. The focus on infrastructure development can be seen from its significant allocations to road transport, railways and power. It has also recognised the need for increasing avenues for long-term infrastructure finance. Increased spending on social sector and rural infrastructure suggests thrust on inclusive development. Support to the agriculture sector has been provided through a more holistic four-pronged strategy which includes increasing output, reduction in wastage, credit support to farmers and impetus to the food processing sector.
B S Nagesh
Vice-Chairman, Shoppers Stop
Overall, a balanced Budget, with bold tactical moves suggesting long-term strategic direction. Among other measures, a firm date for GST and Direct Tax Code implementation and reining in of fiscal deficit are welcome. However, from the retail industry perspective, opening of the retail sector to bring down prices will pave the way for reforms. The relief given to tax-payers will definitely boost consumption and benefit retailers. Further clarification in the FDI policy about strategic and financial investment will increase capital flow into the sector. However, the inclusion of service tax on rentals through a legislative change with retrospective effect needs a careful study, as it can have a major impact on the retail business.
Kalpana Morparia
CEO, J P Morgan India
It is creditable that the tightrope walk required between balancing growth and fiscal consolidation has been achieved, without compromising social spending, particularly in areas like education and health. The finance minister has articulated a clear path to the near-term objectives of 9 per cent-plus GDP growth with an eventual path to cross the double-digit growth barrier. The additional exemption of Rs 20,000 per person for investing in infrastructure bonds should help channelise household savings into this important sector. Tax cuts for the middle class should help sustain the momentum in consumption. Announcement that RBI will consider additional banking licences to private sector players, including NBFCs that meet the RBI criteria, is welcome.
Pawan Munjal
MD & CEO, Hero Honda
The problem of figuring out the whole integer sounds rather daunting, but it is a matter of solving the arithmetics at the end. And the finance minister seems to have done just that! The Budget is a positive and pragmatic one and continues focus on inclusive growth while simultaneously addressing fiscal consolidation.
The Union Budget 2010-11 offers quite a few pluses. The best part relates to the government’s finance management roadmap for the years to come. The second plus relates to the revised tax slabs. Lower taxes will add to the government’s coffers. The third plus relates to the continued focus on rural India which will have a multiplier effect across sectors. And the fourth plus is the greater budgetary allocation to infrastructure.
Sanjay Nayar
CEO & Country Head, KKR India
The fiscal consolidation theme is no surprise and essential at this critical juncture. Higher divestments, partial rollback of indirect taxes and widening of the tax base are well-timed given the economic uptick and are welcome at this stage. However, there haven't been many visible incremental structural measures, outside reaffirmation of the rollout of GST and DTC, and no mention of the need for subsidy-related reforms. Oil subsidy still poses a risk. It would have been an ideal opportunity to elaborate significant steps towards de-bottlenecking the supply side — focus on infrastructure build-out, bank consolidation, insurance reforms, etc. The Budget reflects a pragmatic and calibrated approach, putting a lot of premium on flawless execution.
R S Sharma
Chairman, ONGC
The reduction in corporate surcharge from 10 per cent to 7.5 per cent is a welcome measure. However, the petroleum sector would have liked to see clarity on the tax holiday for the upstream petroleum sector, particularly, natural gas production. Giving subsidy to oil marketing companies in cash instead of oil bonds is a welcome step. While the upstream oil & gas sector had pleaded for service tax exemption, it has been extended to the whole of continental shelf & exclusive economic zone. This will increase the cost of offshore exploration. As of now, the business sentiment for risk capital investments for exploration is somewhat negative. It was expected that some confidence-building announcements would be made in the Budget, which is sadly missing.