Boost for consumption

Budget 2008-09 may look disappointing for India Inc, but it is not so. It's true that the corporate income-tax has not been reduced and even the software industry's demand for an extension of the tax holiday beyond March 2009 has gone unheard.

Click here for Budget Impact 2008-2009

But the good part is that, unlike last year, when the focus was on a few segments, this year's Budget proposals are aimed at touching upon a larger section of the society. The broad theme is to boost consumption, by way of leaving more money in the hands of the individual.

This in turn, should lead to higher sales volumes for companies and hence, the chance of sustaining growth rates. The proposals to lower excise duty and the central sales tax are also positive and should lead to lower prices.

The issue of double taxation of dividends received from subsidiary companies is good news. The higher cut in excise duty on automobiles were also positively surprising. The only issue which requires clarity is how the farm loan waiver will be implemented.