Move towards fiscal consolidation is encouraging: Sanjay Behl, Raymond

1. Creditable that the government managed to meet a stiff fiscal deficit target of 3.5 per cent. Given a lukewarm global economic context and distressed domestic banking scenario, the forward direction conveyed by Finance Minister in his budget speech towards fiscal consolidation is very encouraging.

2. Clear intent of government to spur rural economy by taxing urban market affinity industries like airlines, automobiles, jewellery, tobacco (except beedi) and branded apparel industry. If this results in increased rural spending, and with a possibility of good monsoon, it could augur well for spurring-up consumption driven growth in Indian economy.

3. Imposition of an incremental 2 per cent excise duty in branded apparels will be inflationary and could adversely impact the textile & apparel industry, which is the highest job creator after agriculture in India.

4. We welcome no adverse change in long-term capital gain structure and existing service tax framework. However, lack of clarity on roadmap for corporate tax reduction AND add-on of Krishi Kalyan cess service tax of 0.5 per cent, in addition to recent imposition of 0.5 per cent Swachh Bharat cess is a dampener.