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India Inc gives thumbs up to the Budget

Last updated on: March 1, 2013 15:12 IST

India Inc gives thumbs up to the Budget

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India Inc gave a thumbs up to the UPA-II's last Union Budget before the general elections next year and said Finance Minister P Chidambaram presented a "bold" and "growth-oriented" Budget.

Hailing the announcements, industry chamber CII said the Budget focuses on growth and attracting more investments.

"Many proposals are development-inclusive. It will add to the country's Gross Domestic Product (GDP) growth. We are particularly glad to see incentives for agricultural sector, MSME sector, infrastructure and capital market," CII President Adi Godrej said.

Sharing similar views, Ficci President Naina Lal Kidwai said this is a responsible Budget. "I think that growth is central... The Budget has stressed on the issue of growth and creation of more jobs."

Assocham Secretary General D S Rawat said : "The Finance Minister has presented a bold and pragmatic Budget, ahead of the general elections next year. It is an investor-oriented and growth-oriented Budget."

Besides, the chamber said, the Budget has focused on human resource and rural agriculture sector without touching and giving pains to any section of the society.

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Aiming at higher growth rate for inclusive and sustainable development and to revive manufacturing, Chidambaram hiked outlays for health, water and sanitation, SCs/STs and tribals welfare and rural development.

Also, he proposed a sharp increase of Rs 1.25 lakh crore in agriculture credit target to Rs 7 lakh crore for the next fiscal.

On a 10 per cent surcharge on super-rich for a year on income above Rs one crore, Ficci said, "We would have preferred no disturbance in the tax regime. But the fact is that we have to bear it."

PHD Chamber of Commerce and Industry said the projection of Fiscal Deficit is encouraging with the view that fiscal consolidation is critical for the economy to move towards growth.

The fiscal deficit for the current financial year has been contained at 5.2 per cent of GDP, lower than 5.3 percent, the Finance Minister said today.

PHD Chamber of Commerce and Industry Senior Vice President Sharad Jaipuria said the Budget 2013-14 is inspiring on several sectors on the economy, and seems stable, amidst the present situation of economic volatility in the international and domestic fronts.

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The Finance Minister said in the current year, the Central statistical organisation has estimated growth at 5 per cent, while the RBI has estimated growth at 5.5 per cent.

"Whatever may be the final estimate, it will be below India's potential growth rate of 8 per cent. Getting back to that growth rate is the challenge that faces the country," Chidambaram said.

Further, Jaipuria said the move to levy a surcharge of 10 per cent on industry with taxable income exceeds Rs 1 crore is disappointing, especially in view of the present slowdown in industry segment. "It may prove to be counter-productive and disincentivising for the industry," he said.

On the voluntary compliance encouragement scheme for service tax, Godrej said, it is a good move to ensure that lots of people come in the service tax base.

The scheme is aimed at enticing a large number of assesses to return to the tax fold.

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PwC India Chairman Deepak Kapoor said this budget is clearly a response to the prevailing socio-economic circumstances in the country.

"The most reassuring aspect of the Budget is the Finance Minister's acknowledgement of the criticality of continued inflow of foreign investments for augmenting the country's growth. The focus is clearly on the imperative of maintaining a healthy environment to mobilise it," Kapoor said.

During April-December 2012-13, the FDI inflows have declined by about 42 per cent to $16.94 billion due to global economic uncertainties.

Srei Infrastructure Finance Ltd Chairman and Managing Director Hemant Kanoria said, "The initiatives to provide support to Infrastructure Debt Funds (IDFs) are commendable, especially as the banks are constrained and unable to increase their exposure to infrastructure projects."

He hoped that the IDFs will be able to mobilise resources from a diverse cross-section of investors with the government's active participation.

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Further, Apollo Tyres Ltd Chairman Onkar S Kanwar said, the near 30 per cent increase in planned expenditure for the year would definitely give the infrastructure sector a boost.

"The 3,000 km of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14, would mean heavy movement of goods on the highways, which in turn would revive the commercial vehicle (and tyre) segment," he said.

Standing Conference of Public Enterprises (SCOPE) said the Budget is fairly balanced as it has rightly focused on encouraging investment for spurring growth.

"The Budget in a way seeks greater role for public sector in spurring economic growth. The public sector would get growth impetus from Rs 14,000 crore capital infusion into public sector banks in 2013-14," SCOPE Director General U D Choubey said.

Further, CII stressed the need for faster implementation of the Goods and Services Tax (GST). "Once the GST will be put in place, it would add 1 to 2 per cent to the country's GDP growth," Godrej said.

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Khaitan & Co Partner Sanjay Sanghvi said providing stability and certainty of tax laws will boost investors' confidence.

"The decision to defer applicability of the General Anti Avoidance Rules (GAAR) by two years to April 1, 2016, is a good announcement, he added.

On additional interest deduction of up to Rs 1 lakh on first home loan, KPMG (India) Real Estate-Director Neeraj Bansal said, this is likely to materialise the dream of many prospective first time home buyers with the proposed incentive to home loan borrowers.

"This is expected to bring a dual impact – impetus to the growth of affordable housing segment and increase in employment opportunities in the construction sector," he said. FMCG company Emami said the Budget proposals will improve the investment climate.

"Action plan on GST is a good step which was long overdue. GST implementation would help the organised FMCG sector as it would reduce the anomalies and administrative hassles, besides restricting the tax pilferage by unorganised sector," Emami Ltd CEO (Finance, Strategy and Business Development) Naresh H Bhansali said.

On proposed higher allocation of funds for education sector, BSE Institute Ltd MD and CEO Ambarish Datta said the 17 per cent increase in allocation to the Ministry of Human Resource Development (HRD) is definitely a positive sign for the sector.

"This can provide a boost to building quality education resources at all levels in our country. We hope this will be spent on modernising curricula, investing in research, faculty development and building better education delivery mechanisms," he said.

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The government proposed to allocate Rs 65,867 crore to the Ministry of HRD over the revised estimates of the previous year.

Commenting on Budget, infrastructure firm GVK's Founder Chairman and Managing Director GVK Reddy said, "This is a balanced and growth oriented budget with good intentions for inclusive and sustainable development."

"The Budget has a long-term aim of reviving the ailing economy. The announcements are positive, but implementation is key," he added.

Adani Group Chairman Gautam Adani said, "Overall, this Budget can be termed a moderately populist one as the FM has tried to address majority of the issues faced by the common man and it has also shown the softer side of UPA, especially for women."

"I sincerely hope and wish that this budget will steer the growth of the economy upwards and India into a phase of renewed growth trajectory," he added.

Fullerton Securities and Wealth Advisors' Chief Executive Officer Rajnish Kumar said," The Union Budget, the last before the next general election is a balancing act, a trade-off between populism and fiscal prudence."

Lenovo India's Managing Director Amar Babu said," This Year's Budget is realistic and growth-oriented, but has failed to create any strong levers for the IT and Electronics segment."

"Positive levers include the increased investment in infrastructure, education and health reforms, which will augur well for the future," he added.

BDO Consulting's National Head (Tax and Regulatory Services) Anish Mehta said while the nation looked on with keen interest for economic and tax reforms, Chidambaram had in store a lukewarm and "safe-bet" Budget.

"The Budget proposals of the Finance Minister do not seem to address the slow-down in the manufacturing industry more specifically the Auto-sector on which the Forging Industry depends to a large extent," said Babu Rao, President, Association of Indian Forging Industry.

On hike in excise tax on SUVs, Toyota Kirloskar Motor Vice-Chairman Vikram Kirloskar said "It is already an overtaxed vehicle. The industry is in distress. So I was not expecting vehicles to get over taxed."

ITC Ltd Chairman Y C Deveshwar said "The measures to promote and attract industrial investment through an investment allowance scheme valid for the next two years will spur prompt action to stimulate capital formation in the economy. 


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