Sunil Mehta
Country Head & CEO, AIG-India
Pension reforms key
The budget announcement provides positive direction to the reform process.
But the implementation of Pension reforms for unorganised sector is critical. The finance minister announced that Irda will present draft guidelines by June 30. This is a positive step. Coverage of unorganised sector is long overdue and offers significant growth potential.
This will also have a positive impact on deepening of capital and debt markets. Imposition of service tax on Life insurance was perhaps premature.
The market is still highly underinsured. Exemption under Section 88 for the higher income group have been done away with.
This may not have a material impact since higher income group individuals purchase life insurance to predominantly cover risk and not primarily a tax saving instrument.
The Health insurance initiative of up to Rs 30,000 is a good one, however, may fall short of the needs with spiraling medical cost.
The government should be considering opening of the health insurance industry to private participation. The key concern is the ability of the government to manage the fiscal deficit.
Stronger efforts towards privatization should assist the finance minister in reducing the deficit.
The budget has provided the right tone. However, speedy and effective implementation will be the true test of the reform process.
Arun Jain
CMD, Polaris Software Lab
No credible governance steps
The government has not utilised the opportunity to bring credibility in the process of governance. The aspect of direct taxes imposed now will not be seen as growth deterrents by the infotech industry. The industry will take the new tax structures in its stride and will grow at an impressive rate.
N Lakshmi Narayanan
President and COO, Cognizant Technology Solutions
Corporate tax to hit IT firms
There has not been anything positive for the information technology (IT) industry at large and for software in specific in the Budget.
The introduction of corporate income tax to the tune of 10 per cent of the income will impact the small-to-medium information technology companies.
This would also have a debilitating impact on generating higher employment opportunities in the IT sector.
There has been a half-hearted approach to the IT industry in terms of giving it further fillip.
Barring the 10 per cent reduction in customs duty for setting up earth stations and the mild concession for hardware and IT products, there is nothing noteworthy for the IT sector
Vishnu Deuskar
Managing Director, ABN Amro Securities
Disappointing rate cut
The 50 basis points cut in administered interest rate is disappointing. A bigger alignment with market rates and inflation was expected. On the positive side, though, these rates will henceforth be linked to government securities rates.
The relaxation on the Capital Account was expected, and is a welcome step given the comfortable level of Foreign Exchange reserves. The big disappointment however is the removal of tax concessions from MFs - in my view a very premature step.
Frank Hancock
Managing Director, ABN Amro Asia Corporate Finance
Long political shadows
Expectations were high from the finance minister in this Budget; it
