Under the prevailing condition, the Budget has been a balanced one with focus on inclusive development.
Increased allocation to rural and urban infrastructure, education, social sector and other flagship programmes of the government are the major highlights of the Budget. With India figuring low on various healthcare indices, increased healthcare allocation shows the government’s commitment to tackle the situation. This is bound to make an impact in more ways than one. From the pharmaceutical sector perspective, which is an innovation-driven industry, the increase in weighted deduction from 150 per cent to 200 per cent on expenditure incurred on in-house R&D is a positive and encouraging move.
The government’s commitment to ensure continued growth of special economic zones augurs well for industrial development. While we await the specifics and implementation proposals, the aim to implement the Goods & Service Tax and the Direct Tax Code by April 2011 is a welcome move. Reduction in corporate surcharge will provide marginal relief, while the MAT rate increase, which is likely to balance out the benefits, could have been avoided. The current fiscal deficit at a huge 6.9 per cent of the GDP and double-digit food inflation are major concerns.
