)
Two signals it has given, one is that the fiscal discipline is important and will be maintained, and the other is that the government will be very user friendly on taxation, said Venu Srinivasan, chairman and managing director, TVS Motor.
He added, the advanced tax rulings he has offered to domestic taxpayers also, which was available only for foreign taxpayers.
Generally, the tone would be non-adversarial, and there would be a friendlier environment. Third, when retrospective tax matters come up for review, the government would address sympathetically. It wasn't said in so many words, but the tenor of the speech was it would be considered. But he is not going to go back and do anything on right now what is subjudice. But it appears that in the future, unless in extraordinary circumstances, they would not do retrospective taxation. On the whole, there is one stable and predictable environment which is necessary for the investors.
The second thing is that he has given signals on FDI by opening greater caps on insurance, greater caps on defence etc. Realistically one must understand that four months are over in the new fiscal and the next Budget is only a few months away. He has a limited ability to play, because the last interim Budget overestimated revenues and he has got a tight fiscal.
"I think it is a practical Budget given the limited elbow room the Finance Minister has. It is a very creditable and admirable job," said Srinivasan.
On automobile sector, "you don't expect them to keep on giving subsidies. They have already extended the cut on excise for another six months. And I think it’s time we say that fiscally balancing the Budget is more important. We can’t live on subsidies. It is a practical Budget. We have to start tightening our belt and he is doing it very gently and slowly."
Automobile, the cars and two wheelers, has already shown significant revival last month. I think with the new government the consumer confidence is coming back and what the government now need is not a budget that gives away, but a budget which is responsible and fiscally conservative.
If you ask about the negatives in the Budget, in defence, one could have gone for 51 per cent. 49 per cent and management control with India, people may not give you a high technology or bring high technology manufacturing. But these are steps in the right direction. It is a five year government which has started just 45 days ago, and this is only the first Budget which comes up in a limited time, that too after an interim Budget. So I think we should wait. We should also be patient. Give them time for two more Budgets and then you will see what they will have.
