India Inc believes that the FM has done a terrific job, but consumers may not have got their due
Kumar Birla
Chairman, Aditya Birla Group
The Budget continues in the direction set by the past few Budgets, with its orientation towards sustaining GDP growth at near double-digit levels, containing inflation and narrowing the fiscal gap. Superimposed on these multiple objectives is the overriding need to promote bring about greater economic and social justice. The Budget has a slew of positives. The fiscal stimulus package remains in place with the excise duty at 10 per cent.
Sops have been provided for key sectors such as housing and fertilisers. Equipment for large power projects has been exempted from excise duty. Overall, the Budget is consistent with the vision of transforming India into a major global economic player with equitable growth.
Sunil Mittal
Chairman, Bharti Group
Budget 2011-12 is clearly high on intent to maintain the growth momentum in the economy. From the point of view of industry, though the MAT has gone up marginally, reduction in surcharge on corporate tax is a good step. The FM had little choice but to leave both direct and indirect tax rates untouched to maintain revenue growth to meet his fiscal deficit target.
The rural broadband initiative to connect village panchayats is going to be an important enabler in the nation’s governance. The proposal to introduce direct transfer of cash subsidy will help plug the massive leakages that the PDS system suffers from. Mobile phones can ensure secure, reliable and affordable cash transfer of subsidies directly into the hands of the targeted people.
Chanda Kochar
MD & CEO, ICICI Bank
It’s a growth-oriented Budget that seeks to build on India’s strengths. The Budget recognises the long term growth drivers for the economy and seeks to strengthen them further. Measures in this regard include continued focus on education and skill building to realise our demographic dividend and increased infrastructure investments through measures such as increasing the FII investment limit in corporate bonds, lowering of withholding tax for infrastructure debt funds, mechanisms to strengthen PPP and addressing environment related issues.
Overall, the Budget focuses on areas requiring significant investments, while seeking to take forward the process of fiscal consolidation.
Kris Gopalakrishnan
MD, Infosys
There were worries about continuation of reforms and the Budget addressed that by giving a clear time frame for introduction of big ticket reforms like the New Companies Bill, Direct Tax Code and GST. There were worries about the high current account deficit and he addressed to that to some extent by liberalising further the FDI policy by allowing registered FIIs to invest in mutual funds while at the same time increasing the limits for investments by FIIs in unlisted corporate bonds by $ 20 bn.
The inflation was the core issue for common people and he addressed that by increasing the tax exempt slabs for individuals. The biggest surprise for the markets was the lower fiscal deficit and government borrowing next year.
Rakesh Jhunjhunwala
Stock investor
The good thing about the Budget is the fiscal prudence shown by the Finance Minister. While his intention to keep the government’s net borrowing at Rs 3.43 lakh crore and fiscal deficit at 4.6 per cent in FY12 sends out the right signals, the market is seriously sceptical. The market doubts these fiscal deficit projections and the ability of the government to meet targets, as fiscal discipline depends on a lot of things going forward.
On the reforms side, no bold decision has been taken, some of which were much needed. On the positive side, the corporate sector was expecting a lot of taxes, which would have further impacted profitability. This has clearly not happened, so it is good for corporate India.
Kishore Biyani
Chairman, Future Group
The Budget has ensured that we are now ready to deal with the problems of efficiencies in production, distribution and processing of agricultural produce. The FM has spoken about reforming the APMC act, fuelling the development of warehouse and cold storages etc. But from the consumer point of view, the Budget has nothing much to offer. The relief of Rs 20,000 in direct tax in no way would affect his consumption or spending power.
One major segment of urban poor which accounts for 20 per cent of India has been neglected. The Budget is a serious blow for the apparel industry. Converting optional levy on branded garments into mandatory levy at 0 per cent comes after a 50 per cent in its input costs.
Kaku Nakhate
President & Country Head, BankAm
On the balance of payment side, the minister has opened up two streams; one which is foreign investment in mutual funds with proper KYC and the $20-billion FII investment in corporate bonds. This, in turn, should help alleviate concerns on India's current account deficit funding risks, especially seen in conjunction with the $7.2-billion inflow due to BP’s investment in Reliance gas blocks.
From a Mutual Fund perspective it is another avenue to raise and access funds which was earlier possible only via the offshore route Just as importantly, the increase in the FII limit for corporate bonds along with relaxation in withholding tax for infrastructure bonds will go a long way in developing a strong domestic corporate debt market
Venu Srinivasan
CMD, TVS Motors
The government is moving towards fiscal consolidation and is embarking on a discipline to bring down deficits slowly. Also, there is focus on green initiatives and creation of storage facilities. Another key aspect has been the announcement to increase share of the manufacturing sector in the GDP. We assume this would imply a wide range of reforms in factory processes, in labour acts.
Only services would not be able to sustain the momentum in the economy, manufacturing would have to play an increasingly important role over time. Industrial competitiveness is important for creating the 100 million jobs, the government has in mind, over the next five years. The only way to counter inflation is to resolve supply side constraints. On the whole, it is a balanced and good budget.
Y C Deveshwar
Chairman, ITC
The Finance Minister has done a brilliant job of balancing the challenges confronting the economy and the opportunities that can ignite faster growth and progress of the country. He has sought to consolidate the fiscal deficit through growth stimulated by moderation in taxes thereby encouraging savings and investment. The measures proposed in the Budget to expand the tax base would also provide a more robust source of future revenue accretion and competitiveness of the Indian economy.
In addition, the Finance Minister has provided a strong impetus to inclusive growth by significantly investing in the long term drivers of the economy such as education, skill development, infrastructure and development of the rural economy.
A M Naik
Chairman, L&T
The Budget came at a critical juncture amidst high inflation, tight liquidity, elevated fiscal and current account deficits and issues on governance. Additionally the external environment has become more volatile. In view of all this, the Budget appears balanced. There were no major negative surprises. This is the last year of the 11th five-year plan, and there has been focus on transparency and continuity. Increase in revenues is expected from good economic growth at 9 per cent and broadening the list rather than increasing the rates.
Overall, the Budget is growth oriented with emphasis on rural development and inclusiveness. The highlight of the Budget was the fiscal deficit/GDP ratio of 4.6 per cent for FY12.
