NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News  » Business » Budget 2013 is all about the future

Budget 2013 is all about the future

March 07, 2013 17:25 IST

Commenting on the Union Budget at CII's exclusive ‘Session on Budget Impact Analysis in Financial Capital of India’ - Arun Nanda, Past Chairman CII WR and Director, Mahindra & Mahindra said, "All the populist schemes announced by the Finance Minister have either a job creation motive or a health and sanitation motive."

He commented that the largest allocation seemed to be in skill development and job creation. He added that the real demand is in the affordable housing sector and the Finance Minister could have done a lot more in this space.

Dr Ajit Ranade, Group Chief Economist, Aditya Birla Group provided a macroeconomic viewpoint on the Budget. He began by stating that in the macro backdrop there are five issues to be considered - high inflation, low economic growth, a widening CAD, high fiscal deficit and this being the last full budget.

He said that, "The key macro takeaways on the budget is that there is a growth gamble in the incentives announced for infrastructure, investment allowance and housing. However, there have been no visible inflation control or expenditure compression measures."

He further mentioned that initiatives such as the road regulator and SME access to equity were steps in the right direction.

R Mukundan, Dy Chairman CII WR & Managing Director, Tata Chemicals Ltd stated that "This budget is all about the future - focusing on equality, innovation via incubators, education and skilling."

However issues of the past, such as problems faced by discoms, bank recapitalization, PSU deficit and farm loans did not receive attention, he added.

During the panel discussion, Ashank Desai, Founder, Mastek Ltd gave his perspective on the budget and its effect on the services sector. He said that there are a host of issues on clarification of tax such as transfer pricing that needs to be sorted.

Further, there was no statement by the Finance Minister on e-governance or the role of IT in government. On the

positive side, he mentioned that the attention given to MSMEs in the budget was very welcome since in the service sector, a large portion of revenue comes from MSMEs.

“Allowing 2 per cent of CSR to incubators would help innovation, which is important for the MSME sector”, he stated.

Speaking about the impact of the budget on the manufacturing sector, Ramesh Chandak, Managing Director & CEO, KEC International Ltd said that, “There was no game changer in the budget that would help boost the country's manufacturing sector.”

Labour and power continue to be hurdles and the budget did not address these issues directly, he added.

Richard Collie, CFO, HSBC India, echoing the sentiment expressed by panelists, said that, “In retrospect it is a very responsible budget given the current economic scenario, it could have been far more populist.”

Govind Sankaranarayanan, CFO & COO - Corporate Affairs, Tata Capital Ltd stated that the Finance Minister has undertaken a lot of small incentives and which of these will eventually be good growth enablers needs to be seen.

Barring a few clarifications in indirect taxes, there is a concerted effort to make it easier for foreign investors to enter the market, he added.

While moderating the discussion, Sudhir Kapadia, Partner, Ernst & Young Pvt Ltd, commented that the budget had no major surprises, which would provide some stability in tax matters. He stated that there is a lot of scope to expand the tax base itself, which needs to be explored.

Sunil Kapadia, Partner, Ernst & Young addressed the direct tax implications of the budget in terms of the widening of the tax net, exemptions and deductions. Heetesh Veera, Tax Partner, Ernst & Young commented on indirect taxes and stated that the changes in this budget were either procedural or were focused on taxing luxury.

R Mukundan is deputy chairman CII WR

Complete coverage: Union Budget 2013-14

R Mukundan
Powered by