Budget disappoints India Inc

Indian industry expressed disappointment on Wednesday over Finance Minister P Chidambaram's Budget for 2007-08, raising concerns on lack of measures to increase productivity and for losing an opportunity to provide relief to the corporate sector.

"This Budget is disappointing as there has been no steps announced to increase productivity in agriculture, electricity and other sectors which are not producing up to their potential," CII President R Sesashayee said.

Since revenues from peak customs and excise were increasing, this could have been a time to reduce excise duty to 20 per cent, if not 15 per cent overall, which would have been in line with Kelkar Committee Report, he pointed out.

Ficci President Habil Khorakiwala said a wrong signal has gone to the corporate world as the government has increased cess and dividend distribution tax.

"One does not understand how the multiple taxes should be charged. I think the feeling of the chamber is that the finance minister has lost an opportunity of providing relief to the corporate world," Khorakiwala said.

Echoing similar sentiments of disappointment, Morgan Stanley Head (Emerging Markets) Ruchir Sharma said there was a fine line that the Budget could be 'innocuous or insipid'.

"In absolute terms, this Budget may turn out to be insipid. This is disappointing compared to previous ones," Sharma added.

Dissatisfied over the lack of proposal for the industry, Bharti Group chairman Sunil Bharti said there was not much choice in the hands of the finance minister.

"We asked to simplify duties on telecom sector and that has been addressed by setting up of a committee," Mittal said.

Maruti Udyog Managing Director Jagdish Khattar expressed disappointment that auto sector has been completely ignored.

"Nothing is there for the auto sector in the Budget. Presently it is a disappointment," Khattar said, but added that emphasis on agriculture and education were welcome steps.

Commenting on the variable excise duties based on Maximum Retail Prices for cement, Grasim CFO D D Rathi said the measures would not help the industry. "The tax structure is a hybrid type and cement contributes very low in inflation. So I see no reason why such steps should be taken," he said.

Chidambaram's focus on health, specially on diseases like TB and AIDS was, however, welcomed by the industry.

CII National Health care Committee Chairman Naresh Trehan, said: "The steps are in the right direction, it is very positive. But it remains to be seen how the implementation of National Rural Health Mission takes place."

A 21 per cent increase in outlay for health segment is certainly appreciable, he said, but added health care should have been given the status of infrastructure.