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Budget aimed at growth

Last updated on: March 1, 2011 17:22 IST

Budget aimed at growth

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Rameshkumar V, CFO-Global, CSS Corp

The Budget 2011 is growth and result oriented, with a focus on all socio-economic factors,GGH especially towards infrastructure developments, increased allocation in healthcare, education and strengthening the supply chain side of agriculture. The Indian economy is expected to grow at 9 per cent in 2011-12.

This growth trajectory is very positive, however, the sunset clause on the STPI scheme will be a dampner for the IT industry.

Abolition of surcharge in direct tax was expected, which is a disappointment. No cheer for salaried class with respect to income tax.

Nevertheless, we are looking forward to the FDI liberalization.

The percentage of liberalization is yet to be seen, but this for sure will open inroads for significant developments in the industry.


Image: India is aiming for 9 per cent growth
Photographs: Reuters
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Budget recognises role of IT

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Ambarish Deshpande, Director Sales, McAfee India

We are delighted that the Finance Minister has recognised the role of IT in varied aspects of governance.

Initiatives mentioned in the Budget towards e-filing, e-payment of taxes, computerisation of commercial taxes and the creation of 'Sevottam'a web-based facility for tax payers are strong indicators of the country's movement towards a convenient and automated mechanism of tax administration.

However, as we move towards an information driven economy, it is essential that the 'webification' of these critical applications takes place on secure platforms so that majority of tax payers migrate to using this convenient mechanism.


Image: IT platforms should be secure
Photographs: Reuters
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Budget recognises role of IT

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In terms of the Information Technology sector, the issue of STPI extension has not been addressed in the Budget.

But we expect the proposed Direct Tax code, which will be enforced in April 2012, to continue catalyzing the growth of this industry.

We welcome the Budget's specific and actionable framework towards the enforcement of GST, which will work in the industry's favour by bringing about standardization in taxes.

The reduction of corporate surcharge from 7.5 per cent to 5 per cent will also amount to greater profitability for Indian companies.


Image: Standardization in taxes needed
Photographs: Reuters
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Status quo Budget

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Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General Insurance
This is a "status quo" Budget. There is no big bang reform propelling India to the next stage of growth.

However, getting down the fiscal deficit, while predicting a 9 percent GDP growth is creditable. The success of the Budget will count on how the ministry is able to implement and execute on their proposal.

In the absence of a clear path to reforms, we perhaps have to depend on Pranab Mukherjee's past history to steer the Indian economy successfully this fiscal year.

From a general insurance perspective there is very little the Budget offers.

For this sector, we were expecting more reforms for financial inclusion, woman empowerment and senior citizen benefits.

Overall

What we have to watch out for is Pranab Mukherjee's commitment to reducing the fiscal deficit. Unless there are clear indicators on how subsidies are going to be stabilized and controlled, the 4.6 per cent commitment seems ambitious.

While for the banking sector there is greater thrust on capital infusion for ensuring capital adequacy, we expected a similar proposal for the increase of FDI to 49 per cent.

Currently for us it's a wait and watch on what further defines liberalization of the policy.

There is some progress made in the infrastructure sector, education sector and housing, with the increase in the exemption limit by 5 lakhs with 1 per cent concession.


Image: Budget does not offer much to general insurance
Photographs: Reuters
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Status quo Budget

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The personal tax exemption for senior citizens and the introduction of the new special senior citizen category with even higher tax exemption is a positive. However, this remains restrictive.

Some of the core issues relating to funding for retirement as well as ways to address problems caused by rising health care costs especially for the elderly has not been addressed.

Its high time there is a move in encouraging the growth of alternative vehicles. The National Mission for hybrid and electric vehicles is the first step.

But the success of this will depend on the action plan that will be laid out for inducing growth of India as a manufacturing hub.

From a general insurance industry perspective

Rural propositions are more focused on the agricultural sector. Micro insurance products should ideally have been exempted from service tax.

This would have triggered penetration of the insurance sector into the rural markets.

With the rising medical inflation its disappointing that the 80 D benefits remain unchanged and neither are there any significant attempts made to increase health care infrastructure.

This will lead to increased healthcare costs and consequently to rise in health insurance premiums.


Image: Need to insure rural sector
Photographs: Reuters
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Disappointing Budget for salaried class

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Mythili, CFO, Amtex Systems
Very disappointing budget for the salaried class as the budget has not offered any significant relief commensurate with the raising inflation. No specific measures to combat inflation.

Though covering SEZ under MAT regime is a welcome measure as most of the IT majors will be covered by MAT, inequalities between the IT majors and ITSMEs will continue as certain ITSMES outside the SEZ will be forced to pay regular corporate tax and units within the SEZ will have to bear MAT.

The Indian economy can expect another huge scam in the area of Direct Cash subsidy for BPL families.


Image: No steps to control inflation
Photographs: Reuters
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Disappointing Budget for salaried class

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Medical cost will further go up in view of the service tax in specific hospitals. Overall, a lacklusture and an uninspiring budget.

Railway Budget:

1) Introduction of ACD and GPS based fog safe systems is a welcome measure.

2) Introduction of Super AC class whether this will be a value addition to the general public needs to be seen since high pricing will make it unattractive for common man.

3) Upkeep of both trains and stations needs to be spruced up drastically but no major thrust in the budget.


 


Image: Medical costs will increase
Photographs: Reuters
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