Budget 2012: India Inc calls Budget missed opportunity

As Finance Minister Pranab Mukherjee resorted to mopping up more taxes, a disappointed India Inc said his Budget is a "missed opportunity" and would have cascading impact on inflation and consumer demand.

"It is not going to stimulate growth in the economy," Ficci President R V Kanoria said.

CII President B Muthuraman said he was expecting much more and the excise-related proposals would push up prices.

However, the steps to control fiscal deficit would augur well for the economy.

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"The Budget is a missed opportunity," Siddharth Birla of C K Birla Group said. Biocon CMD Kiran Majumdar Shaw expressed fears the Budget would be inflationary.

Harshpati Singhania of J K Group echoed similar views. "Increase in excise duty will have inflationary implications," he said.

The government, hard-pressed for cash, proposes to levy additional indirect taxes of Rs 45,940 crore for 2012-13 at a time when the industry is facing slowdown in demand.

"...deficit is still high which is disappointing. Things are going to become costlier for final consumer," Godrej Group Chairman Adi Godrej said.

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Assocham President R N Dhoot said that he was expecting that the personal income tax exemption limit would be raised to 2.5 lakh per annum. "It is not done which is disappointing."

However, certain initiatives like liberalising the external commercial borrowing rules and boost to investment particularly in infrastructure sector were hailed by industry leaders.

The BSE benchmark Sensex was almost flat during mid-day after the Budget was unveiled.

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Leading industrialist Rahul Bajaj said though the overall budget is good for the weaker section, it was not positive for the industry and the corporate sector.

"I don't see the dynamics, I only see the possibility of the mid-term elections. I don't see much for the industry. You either raise legitimately or raise expenditure," Bajaj said.

ICICI Bank Managing Director and CEO Chanda Kochhar said the Budget is pragmatic and credible.

"The borrowing is higher than market expected. Tapping the subsidies, we have to really watch how it is done. I am not hopeful that the RBI will be able to cut rates in April,"
Kochhar said.

Madhu Kela, Chief Investment Strategist, Reliance Capital, said there were "no negative or positive surprises in the Budget" and "Budget arithmetic is believab#8804 estimates are realistic".

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HDFC Chairman Deepak Parekh said raising customs duty on gold is a step in right direction.

"We should give benefit of doubt to the minister on fiscal deficit target of 5.1 per cent. The fiscal deficit target is realistic," Parekh added.

"I think sooner than later the government will raise diesel prices. It may not be able to completely deregulate in view of the political compulsions. But there will be some decrease in fuel prices as well as reduction in fertilizer subsidies," Uday Kotak, Executive Vice-Chairman and Managing Director of Kotak Mahindra Group, said.

The Confederation of All India Traders criticised the Budget and said it will wreck the bone of 'Aam Aadmi' (comman man) of the country.