Finance minister P Chidambaram’s budget has been pro-farmers and pro-middle class. But what do businessfolks think about it? Well, they say it’s a mixed bag. And how?
Read on…
Alok Ohrie, Managing Director, AMD India
Ø I would like to congratulate the FM for coming out with a budget that strengthens our overall economy and especially its two foundation pillars – agriculture and education. Higher education has received its rightful importance in this year’s budget. The decision to set up three more IITs, national knowledge centers, two more Indian Institutes of Science Education and Research and scholarships for science education are extremely relevant measures to grow the talent pool. These initiatives will play a critical role in preparing and encouraging graduates who will take the high technology sectors to the next level of excellence.
Ø AMD has set up two more R&D centers in Bangalore and Hyderabad. The setting up of these development centers has helped the Indian PC and Hardware market. AMD has partnered with several state Governments for Rural development programs. We see this as a step ahead to take India to the next line of growth.
Ø The exemption of specified raw materials for use in the IT and electronic hardware industry from customs duty is a positive sign. Technology advancements will fuel converged devices for the well informed on-the-move consumer. The reduction in the duty on converged products is a timely step to keep the country on par with global technology developments.
R G Chandramogan, MD, Hatsun Agro
Ø Personal Income tax concession is a welcome announcement which is a benefit to our employees.
Ø A waiver of Rs 60,000 Cr towards an agricultural loan was done in this budget. If only the Government had invested Rs 6000 Crores towards educating the farmers on optimal utilization of available resources and train them with simple tools to effectively reduce the cost it would have helped them profitably and also saved the banks from the waiver.
Ø Soil testing lab subsidy is a welcome programme and will also help the farmer in understanding the importance of soil management.
Ø Nutrition based subsidy is the most logical step in the right direction.
Ø Removal of import duty on bactofuge will lead to better quality milk processing in the years to come.
Monisha Advani, Managing Director, EmmayHR
Ø This budget demonstrates economic prudence and caution. By focusing on relief and development to the agriculture sector, a clear message is being sent – the year of the Kissan (farmer) is back. Also, if a cross section of the budget were to be analyzed, the clear beneficiary is the common man, who will find it easier to come by medical relief and support, in a small or hybrid car that he will own and pay off loans that he received on the back of the subsidized education he received, thanks to the budget presented by this government.
Ø Interesting to see pharmaceutical and healthcare receive impetus in the form of excise duty relief and incentive to research.
Ø Overall, am personally pleased to see a budget assuming accountability towards the manufacturing sector. We have spent a decade bolstering the service sector and rightly so. It has yielded rich dividends in contributing to the GDP and increasing employment opportunities. However, the manufacturing sector is the foundation of our economy, as much as agriculture, and it deserves renewed incentive to grow to competitive levels. While I expect the suggested subsidies to increase employment, I would have expected the education budget to be aimed towards cultivating talent for this sector to be more vocalized, than is the case. Creation of jobs needs to be balanced with development of talent.
Ø On income tax – no path-breaking change. On indirect and corporate tax – relieved that there hasn’t been incremental ambitions. On fringe-benefits – I maintain that the finance minister needs to reflect on what tools he equips employers to retain workforces, which will aid medium and long term value and wealth creation for the economy. FBT is a contrary action that deters employers for disbursing traditionally lock-in benefits for fear of impact.
Rajeshwar Balasundaram, COO Global Adjustments
Ø This budget is clearly investor friendly and should improve the quality of the business environment in India, with the duty cuts and investments in infrastructure that have been announced. Consequently, we can only see an increase in global interest in India that will lead to more foreign direct investment and its collateral benefits to the economy.
Srinivas Rao, CFO, Perot Systems
Ø There is a lot of attention being given to education in this budget. FM wants to develop India as a Knowledge Society. Rs.100 crores to be given to IT Ministry for knowledge centers, new IITs, Navodaya Vidyalaya’s, large allocation to the Sarva Siksha Abhiyan, Bharat Nirman schemes are all way to go. Education budget going up from 28k crores to 34k crores is all way to go that will invest in the long term sustained potential of the country in addressing resource availability and some of the current challenges of the country.
Ø Agriculture also clearly seems like the big focus area in the years to come. A huge outlay for credit to the agricultural segment. Big write offs in the region of about Rs 60000 crores in terms of farmers debt to help distressed farmers. Though it is being viewed as a populist measure by the stock markets and the industry, this should inject a renewed energy into the agricultural segment who seemed to have been behind in the growth.
Ø Corporate taxes remaining unchanged would not be a relief to the export industry especially the IT and ITES segment that’s been hit by the rupee appreciation and tax holiday going away in year 2009. There was a lot of expectation around this front. This will continue to challenge the IT and ITES industry which has been a major export earner and the driver for the country’s growth.
K Ganesh, Founder & CEO, TutorVista.com
Ø We welcome the thrust on education in this year’s budget.
Ø We will have more talent in the area of science and technology with the addition of technical institutions such as the IITs and IISc.
Ø IT infrastructure in rural districts will get a boost with the grant provided for broadband centers. It would have been good to see specific allocation to ensure these Rs 34,600 crores are actually spent correctly without leakage of funds. So, earmarking a small percentage for auditing and monitoring would be prudent.
Ø The thrust in building high quality schools i.e. 6000 by FY 09 is laudable. Infrastructure in schools is very poor and this will address the concern. Also, mid-day meal allocation being increased will directly contribute to lowering drop out rates and is welcome.
Kris Gopalakrishnan, CEO and MD, Infosys Technologies Ltd
Ø Overall economic growth has averaged 8.8% in the last four years. GDP growth rate for the year is estimated at 8.7% with services leading the growth at 10.7% and manufacturing growing by 9.4%. Tax revenues have been extremely buoyant, increasing to 12.5% of GDP, fiscal deficit is down to 2.5% next year with revenue deficit at 1% of GDP. The economy is on a roll. This has allowed the Finance Minister to make significant investments in agriculture, education and social sectors. However, we see inadequate allocation for higher education once again.
Ø In terms of direct taxes the Finance Minister has given significant relief. This will help corporate India reduce wage inflation. Excise duty has been reduced across the board and coupled with the reduction in direct taxes, consumption and production should increase significantly, boosting growth.
Ø The budget has not been positive for the IT industry. Smaller companies should have been given tax relief in this budget to counter the impact of a sharply appreciated rupee. The increase in excise duty for packaged software will lead to increased piracy.