Better than expected Budget, India Inc hails FM
PTI February 28, 2011The industry on Monday welcomed the Budget terming it as "positive" and "growth-oriented" and some leaders were pleasantly surprised with the unchanged excise rate in major sectors.
"Overall, the Budget is a growth-oriented and a good one and it has not taken the last year's growth for granted," CII President Hari Bhartia said.
He, however, said the Finance Minister should have given more stress to the health sector and the "demand for treatment of healthcare as infrastructure has been overlooked".
Bhartia said the targetted subsidy on kerosene and food will reduce the wastage of subsidy.
"Also the digitisation of income tax (I-T) system will expand the tax base. Compliance and self regulation will reduce human interaction," he added.
Expressing similar views, Kotak Mahindra Bank Vice-Chairman and Managing Director Uday Kotak said: "Budget is positive for the equity and bond market. A 4.6 per cent fiscal deficit is looking like a very good number."
He said the auto sector was expecting a hike in excise, which has been kept unchanged at the existing levels.
"Budget has positively surprised us," he said, adding the "Budget has done better than normal expectation".
He, however, said the income tax relief provided to general tax payers as "marginal move" as it has been increased by only Rs 20,000 to Rs 1.80 lakh from current limit of Rs 1.60 lakh.
Commenting on the proposal to launch a national mission for hybrid and electric vehicles, Society of Indian Automobile Manufacturers (SIAM) President Pawan Goenka said: "This is a very welcome move. It will allow advanced technologies to be developed in India rather than importing technology."
Although there were no specific measures, such as allowing FDI in multi-brand retail, Future Group Chief Kishore Biyani said the government is showing its recognition through the Budget what the modern retail has been saying so far.
"The announcements made to strengthen the farm sector, cold chain investments and recommendations to amend the Agriculture Produce Marketing Committee (APMC) Act are all indicative of the government's will," he said.
"All the measures announced today are a precursor for things to come," Biyani added.
ENAM Securities Chairman Vallabh Bhansali: "He (Mukherjee) has succeeded in fighting all populist forces I am happy with what he has done."
Expressing satisfaction over the various proposals of the Budget, Godrej Group Chairman Adi Godrej said: "I think it was a very well balanced Budget and growth oriented. It will be very good for the economy. The decision to formally introduce the constitutional amendment for GST is a very good one."
He said increase in limit for income tax exemption for tax payers will add to consumption "which is desirable".
While welcoming the reduction in surcharge for companies from 7.5 per cent to 5 per cent, Godrej, however, said: "It is desirable, although I would have liked to see surcharge completely removed.
"I didn't see any thing negative in the Budget. But what I like the best is that the widely expected increase in excise duty was very sensibly not resorted to," he added.
Terming the Budget as balanced, HSBC India Country Head Naina Lal Kidwai said: "The finance minister has allowed the growth agenda to stay on track."
She also said the Budget has also set the direction for financial sectors reforms with Mukherjee promising take forward many pending Bills in Parliament soon.
Ficci President Rajan Bharti Mittal said the Budget is balanced and will sustain the growth momentum, while giving main emphasis on agriculture and manufacturing.
However, not all industries were happy with the Budget proposal, specially those in the iron ore mining sector which will now have to pay 20 per cent export duty.
"Iron ore industry will not be able to absorb it (export duty 20 per cent). It will affect export earnings of the country," Roongta Mines Ltd President Siddharth Roongta said.
Principal Economist for Deloitte in India Shanto Ghosh said: "Overall, the policy prescriptions outlined in the Budget were lacklustre and can be considered more of tinkering around the edges without ushering in radical reforms."
Ghosh, however, said the commitment to refrain from additional borrowing to fund the fiscal deficit will certainly help retain the momentum in terms of private investment that is critical to sustained growth.
Motilal Oswal Joint MD Ramdeo Agarwal said no increase in excise rates has boosted market. "Auto and banking sectors are clear winners in Budget."