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India Inc gives thumbs up to the Budget

Last updated on: February 28, 2011 19:08 IST

India Inc gives thumbs up to the Budget

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Here is what the industry leaders have to say about the budget:

"Maintaining excise duty rate constant is a great relief to the industry"
Deepak Jalan, Managing Director, Linc Pen

The budget has been quite balanced considering the given circumstances. The excise relief of 2 per cent extended in the previous budgets was not rolled back, which is a great relief to the industry.

The continued priority to the education sector is appreciable.

However, the tax exemption limit increase could have been bolder, which has disappointed the common man.

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Image: Deepak Jalan, Managing Director, Linc Pen
Photographs: Courtesy: Linc Pen
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India Inc gives thumbs up to the Budget

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"Intention to move new legislations regarding Insurance, Pensions and Banking is welcome"
Dr P Nandagopal, Managing Director and Chief Executive Officer, IndiaFirst Life Insurance Company

The budget is positive in its reform direction. The FM clearly stated that the new legislations regarding Insurance, Pensions and Banking would be tabled in this session of the Parliament.

This is a welcome move considering that it took lot of time for evolving the consensus on the proposed reform especially about insurance.

On the direct taxes side, the clear reference to the DTC being effective from April 1, 2012 is again a positive statement considering that DTC would be a comprehensive code that would consolidate various aspects of income tax and hopefully address the major issue of treating the long term saving products differently from the short term saving products.

The fact that there are no new increases in the service and excise taxes is again a positive move. The Government thrust to move from a subsidised regime of essential commodities to a direct cash transfer to the BPL families would help the poor better and reduce substantially the inherent leakages leading to better fiscal deficit management.

In the overall sense, I believe it's a positive budget.

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Image: Dr P Nandagopal, Managing Director and Chief Executive Officer, IndiaFirst Life Insurance Company
Photographs: Courtesy: IndiaFirst Life Insurance Company
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"Increased money flow in agriculture will aid GDP growth"
A Vellayan President, SICCI (Southern India Chamber of Commerce and Industry); Executive Chairman, Murugappa Group and Chairman, EID Parry (India)

Overall the Union Budget 2011-12 has been a balanced budget. The government is moving in right direction with regard to reforms.

The government has reduced the fiscal deficit to 5.1 per cent in FY 11 and will bring it down to 4.6 per cent in FY 12 and 3.5 per cent in FY 14. This is positive for developing economy.

The government has given special emphasis on the agriculture. Agriculture is major part of the 8.2 per cent GDP growth in FY 10. Increase in credit flow to farmers by 27 per cent from banks is positive.

Other positive aspects of the budget are the rural infrastructure for cold storage and warehousing etc which enables no food production wastage and treating fertilizer investment as infrastructure investment.

The money flow to the agriculture will help in overall GDP growth.

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Image: EID Parry
Photographs: Courtesy: Murugappa Group
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"Hike in export duty on iron ore should ensure higher domestic availability"
C S Verma, Chairman, Steel Authority of India

The Budget is firmly growth-oriented and has various positives for the steel industry. The Govt's continued thrust on development of infrastructure and manufacturing will help steel demand in the country to grow. Besides, higher support for the housing sector is a step in the positive direction.

"Higher export duty on iron ore has been a long pending demand of the steel industry and the Budget has taken care of the issue by increasing the export duty to 20 per cent. This should ensure higher availability of iron ore for the Indian steel industry.

Again, withdrawal of export duty on pellets should encourage installation of pellet plants by mining companies. More pellet plants in the country will also benefit the steel industry.

Further, reduction in surcharge on income tax from 7.5 to 5 per cent will have a positive impact on domestic companies, making available disposable surplus for investment. The proposed Constitutional Amendment Bill on GST is also a welcome development."

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Image: C S Verma, Chairman, Steel Authority of India
Photographs: Courtesy: SAIL
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"Finance Minister has made it easier for FIIs to invest into India"
Atul Gupta, Managing Director, Orbis Financial

"The Finance Minister has made it easier for the FIIs to invest into India by giving them yet another option of investing through the Mutual Fund route.

It's always been easier for foreign institutions to invest into Indian financial markets than the Persons of Indian Origin or Non Resident Indians!

As a Custodian, I would have liked if the FM and RBI consider and overhaul these archaic processes controlling NRI investment which need to be closer to parity with Resident Indians.

A review along these lines would go a long way in improving disclosures and practices."

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Image: Atul Gupta, Managing Director, Orbis Financial
Photographs: Courtesy: Orbis Financial
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"Emphasis was laid on affordable housing"
R K Jain, Executive Director, Wave City

As expected emphasis was laid on affordable housing as low- cost housing loans of Rs 15 lakh will be eligible for one per cent interest subsidy, which will help in increasing the demand for such housing.

So in the near future we will see more of houses that will not exceed the cost of Rs 25 lakh. It simply means that places in and around Delhi will see more people thronging these places to book a home for themselves.

Earlier existing interest subsidy is on loans of Rs 10 lakh where the cost of house is Rs 20 lakh. We hope that NH 24 in Ghaziabad, which has maximum number of projects in Rs 25 lakh bracket, will become the centre of attraction.

We expected much more from the budget but once again the sector has to make do with whatever has been thrown into their kitty.

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Income tax deduction u/s 80-IB which was available to developers for affordable housing till 01.04.2008 was not renewed.

This concession was highly successful in triggering affordable housing but since State laws were not permitting higher densities, the benefit of it could not be realised to fullest possible extent.

Nothing was said on reduction of stamp duty and making it uniform across all states. Also, nothing was said regarding the concession if stamp duty has already been paid on one transaction.

These things are also responsible for increase in property rates. We can only hope that in future government will pay heed to these demands and needs of the real estate sector.

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"Emphasis on rural development, both through banking and telephony initiatives, is very welcome"
Naresh Wadhwa, President & Country Manager, Cisco India and SAARC

The budget this year provides a number of measures to promote inclusive growth, which in my opinion is crucial to sustain India's development ambitions.

The emphasis on rural development, both through banking and telephony initiatives, is very welcome. I'm particularly thrilled about the allocation announced for rural telephony as this will surely give a fillip to boosting connectivity for villages.

The budget also has a number of initiatives to take banking to the masses. Among them, the move to set up banks in villages of more than 2000 people, the bill to allow RBI to grant more banking licenses and additional support to NABARD are particularly noteworthy.

On the downside, we would have liked to see infrastructure status being given to rural healthcare initiatives as well, as they play a key role in promoting inclusive growth.

On the overall industry front, there are a few initiatives such as treaties to avoid double taxation and reduction in corporate surcharge which will help in promoting growth.

 


Image: Naresh Wadhwa, President and Country Manager, Cisco India and SAARC
Photographs: Courtesy: Cisco
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