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NEW DELHI, MARCH 02 :
STANDING Conference of Public Enterprises (SCOPE) organized Seminar on 'Implications of Union Budget 2010-11' here today. Dr. M. Govinda Rao, Member, Economic Advisory Council to the Prime Minister & Director, National Institute of Public Finance & Policy delivered the keynote address. Mr. Arup Roy Choudhury, Chairman, and Dr. U.D. Choubey, Director General, SCOPE also spoke on the occasion.

Dr. U.D. Choubey, DG, SCOPE complimented government for a number of measures initiated in Union Budget for achieving a very high growth trajectory. Emphasis on rural upliftment, health, sanitation, education, infrastructure etc. indicate government’s concern about the inclusive growth. However, DG SCOPE expressed his concern about the governance because all these schemes and policies of the government as highlighted in the Budget shall remain unfulfilled if governance is not given top priority.

Mr. Arup Roy Choudhury, Chairman, SCOPE said that PSEs have created national wealth. In spite of that, it is surprising that the shares of PSEs are valued very low on stock exchanges. This should be looked into.
Chairman SCOPE also said that the decision when to go to market for IPO or FPO should be left with the professional managements of PSEs to get maximum gains.

In his keynote address, Dr. M. Govinda Rao, Member, Economic Advisory Council to the Prime Minister & Director, National Institute of Public Finance & Policy said that the Union Budget 2010-11 has missed an opportunity to advance reforms towards GST in a meaningful manner. Service Tax continues to be selective and there is need to broad base it. It is necessary as it works well if it is broadbased, he added.

Dr. Rao said that more allocation on social and infrastructure sector while compressing revenue and fiscal deficit will continue to be a challenge for the government. Government needs to be careful about fiscal deficit and fiscal consolidation is necessary. He said the Central Plan outlay of the government will increase by 23.2 percent and around 70 percent of the Plan investment would be met by public sector through internal and external budgetary resources.

Mr. Sanjiv Jain, Executive Director (Tax & Regulatory Services) of M/s. Ernst & Young and Mr. Bipin Sapra, Partner, Indirect Tax, E&Y spoke about the salient features of the Budget proposals on Direct Taxes and Indirect Taxes respectively.

Ms. Neeru Abrol, Director (Finance), NFL chaired the Open Forum Panel discussion. The seminar was attended by many Directors (Finance) and senior executives of CPSEs. (editor@thesynergyonline.com)

BUDGET LAYS FOUNDATION FOR ENVIRON-FRIENDLY DEVELOPMENTS : THE 3C COMPANY

Thesynergyonline Corporate Bureau

NEW DELHI, MARCH 01 :
WELCOMING the Budget announced by the Finance Minister Mr Vidur Bharadwaj, Director, The 3C Company said that the announcements made will go a long way in stabilizing the overall economy and lay a roadmap for attaining the double digit growth rate.

“We welcome the Union Budget for the year which has made a small beginning towards providing sops for the benefit of conserving energy and lead to efficient usage of construction material. The Government’s move towards cutting the excise duties for CFLs by 50% will provide an impetus to the usage of energy saving lighting fixtures and help spreading awareness for energy efficient materials, Mr Bhardwaj said.

Adding further, he said “New direct tax rates slabs would offer higher dispensable income for individuals. One can expect greater levels of such surplus money to come to the real estate segment as investments. This will indeed give a boost to the sector.

“We however expected the Government go a step forward and announce a subsidy package and tax relief for development of green buildings. This would have gone a long way in increasing green development in the country. Providing industry status to real estate in this budget would have further facilitated easy availability of capital for developers as real estate sector is still not preferred for investment by the financial institutions,” Mr. Bhardwaj said.

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A PRAGMATIC , PROGRESSIVE, INCLUSIVE GROWTH- ORIENTED BUDGET ; FM URGED TO INCREASE MAT RATE

Thesynergyonline Economic Bureau

NEW DELHI, FEB 27 :
WHEN he sat for meals, Thiruvalluvar, a 7th Century Indian poet, kept a needle and a small cup filled with water by his side. "Food should not be wasted, even a grain is precious. Sometimes, stray grains of cooked rice or stray pieces of cooked vegetables fall off the plate or away from it. While I eat, I lift them off the floor, with the help of this needle and stir them in the water to clean them and eat them."

At the top of this year’s Budget spiralling food prices is biggest concern for the common man. Budget Budget addresses short term actions taken to help the common man get affordable food and in the long-term introduce innovation and technology in enhancing storage capacity, credit support to farmers and increasing food processing to address concerns of food security. Affordable food is the simple hope of every citizen , said Dr Swati Piramal , president , ASSOCHAM while delivering her speech at Vigyan Bhawan here on Union Budget 2010-11.

"You have responded to our kirtan on research and development by giving this benefit to all industries. As a scientist personally I am truly delighted and we will invest in technologies that help lift our citizens out of poverty, hunger and promote health. We promise that we will not let your faith in us go unrewarded.," she added in an address to the Union Finance Minister, Mr Pranab Mukherjee , colleagues from CII and FICCI .

John Maynard Keynes said, “The importance of money flows from it being a link between the present and the future.” Similarly the Budget 2010-2011 plays a key role in the future of India. You have held a steady hand on the wheel of our economy despite the global recession .The continued stimulus package and a calibrated withdrawal will help retain stability.

Your announcement regarding GST – a tax which needs a broad based consensus from the states and a clear time-line of April 2011 has given us a clear direction. We hope that the supply chain disruptions that happened during VAT implementation will be avoided, she said..

We hope that as you will lend us your ears on our concerns for the direct tax code especially those on asset- based taxation. Indian industry needs and efficient, equitable and transparent tax code. Our Chamber has launched a national economic awareness campaign with the support of your ministry. I have visited 14 States talking about the three critical tax reforms. Indian industry is looking forward to being strong and competitive and taking its rightful place at the head table of the high-growth economies of the future. You have performed a remarkable balancing act between growth rate of 7 percent to 9 percent on one side and reducing the fiscal deficit to 5.5 percent this year on another, Dr Piramal said.

You have put more money in the hands of the consumer by raising the threshold of taxable income and raising the tax slabs and made special programmes for the upliftment of women. Sir, it is now well known that it’s not just the BRIC countries but women are the biggest new emerging market with women making the majority of buying decisions. We applaud your effort for improving of public service delivery and improving the justice system. Our chamber has just become a partner with the Delhi Arbitration Centre (under the aegis of the Hon’ble Delhi High Court) in an effort to make world class arbitration available for timely justice, she pointed out..

She urged Mr Pranab Mukherjee , Union Finance Minister to increase the MAT rate as it discourages companies investing in infrastructure and heavy investment in capital assets.

As a doctor, I am delighted that healthcare spending has increased and an equitable tax on medical devices. After the right to information, right to education, right to employment our citizens must have the right to health and good nutrition. The road is long and we have miles to go, she said..
She further said that this this is India’s moment to take the opportunity of accelerating when others are going slow, it is history taking a turn, and it is time to fly.You said on television that you did not know how people would view your Budget so I imagined that the poet Tiruvallar rewrote your Budget in terms of a brief poem:

What Pranabda what is a country?
“Where unfailing fertile fields, worthy men
And strong merchants gather to trade in peace- that is a country.
A land renowned for its vast wealth, free from calamities
And yielding in abundance- is indeed a country.
Call that a land which bears every burden that befalls,
Yet pays in full all tariffs owed to the government.
Free of famine, endless crisis and ravaging epidemics -that is a flourishing nation.
An incomparable country is one never devastated,
Yet, if hurt by foes, would rise again and prosper undiminished.
Rain waters, clean rivers and oceans, water-shedding mountains
And strong defence are the features of a good country.
Five are the ornaments of a country: good health, abundant harvests, wealth, happiness and safety of its citizens.
Growth, Earth, Health and Youth are your pillars,
Strengthened by ancient culture and modern industry,
Talent, knowledge, technology and innovation.
Sir your budget is a green light for growth
Arise, awake, a new India your golden moment is now.”

OVERALL IT IS A POSITIVE BUDGET

Kaushal Sampat, COO, Dun & Bradstreet India.

“AT a time when the Indian economy is firmly on the revival path, what was required from the Budget was a further push for consumption and investment. The Budget announcements have done just that. The continued thrust on agriculture, infrastructure and rural development will unlock much of the economic growth potential in the medium-term."

"Although the excise duty rates have been hiked, they still remain at the pre-crisis level and should not be a deterrent in the process of economic recovery. Along with maintaining the focus on broad based growth, the Budget has also addressed concerns on the fiscal deficit front. While there were no major big bang announcements in this Budget, the overall tone is certainly pro-reformist. The Budget has emphasized on the Government’s intent towards moving forward on the reform agenda. Overall, it is a positive budget and we would assign a rating of 8 on 10.”

BUDGET A ROADMAP TO CUT FISCAL DEFICIT TO 4.1%

Deepak Sood, CEO & MD, Future Generali India Life Insurance

POST the Budget announcement Mr. Deepak Sood, CEO & MD, Future Generali India Life Insurance Co Ltd said "The finance minister has addressed the two most crucial issues of economic growth & fiscal consolidation.

To support economic growth, he has significantly enhanced allocation for infrastructure, road, transport, power, education, agriculture and rural development. Similarly the budget lays down a well defined road map for bringing down fiscal deficit from 6.9 percent in the current fiscal to 4.1 percent in FY 2012-13. The additional tax exemption of Rs.20, 000 for investment in infrastructure bonds will attract long term savings for infrastructure funding."

Further he added "The Indian middle class will have more disposable income because of lower personal tax. We believe this will result in higher savings and boost the growth of insurance companies in India. The budget did not mention the hike in FDI limit for the insurance sector which we hope will be addressed separately. More clarity regarding GST & Direct Tax Code will be welcomed. The proposal to set up apex level financial stability council and legislative reform panel is a step in the right direction. Overall the budget is growth oriented and has a progressive outlook."

DUE IMPORTANCE TO INFRASTRUCTURE SECTOR IN BUDGET

Atul Punj, Chairman, Punj Lloyd Group

'PUNJ Lloyd Group applauds the initiatives undertaken by the Finance Minister in Budget 2010. The government has given due importance to all important sectors like power, roads, railways, renewable energy etc. We appreciate the allocation of 46 percent of total plan outlay to the infrastructure industry.

The infrastructure is extremely crucial as the world is looking at India and this announcement could not have come at a more opportune time. To facilitate 20000 MMW of solar power by 2022 is another welcome step as development of renewable energy is extremely crucial for the country.

The taxation relief to individuals is also appreciable outcome of the budget. Increased allocation for Rural and Urban development infrastructure will further help in improving the living standard of the people. Budget 2010-2011 has presented a renewed sense of optimism over the country's growth and clear signals from policymakers to bring deficits back to manageable levels .'

BUDGET TO BOOST DEMAND IN AFFORDABLE HOUSING

Bhim Yadav, CEO, Falcon Realty Services

"WE welcome the government's decision to extend one per cent interest subsidy scheme for affordable housing until March 2011 as this will encourage the target audience of this housing segment to purchase their own home instead of living in rented accommodations.

This will provide a permanent investment solution to the buyers and will also boost demand in the affordable housing segment for real estate companies.

Moreover, the Delhi-Mumbai Industrial Corridor has been taken up for development. This comes as an endowment for Falcon Realty as our projects are situated near this passageway and development of this route will call for easy and convenient navigation. We hope to make the best of it. By and large, I am happy with the ministry's take on the real estate sector."

UNION BUDGET 2010-11 A VERY TIMELY INITIATIVE

Alok Bharadwaj, Senior VP , Canon India

AT a macro level, I am very happy with this year's budget. People are pleased and extremely satisfied. India is at a stage where it has no alternative but to maintain high growth. The Finance Minister has tried to address three broad issues in our economy so as to achieve long-term sustainable high growth. This year's budget has stimulated demand generation by reduction in individual tax slab which will lead to more disposable income.

This is a very timely initiative as with the consumer's spending capability going up the economy will be able to recover faster. Investments in infrastructure which have been introduced are required for capacity building. I particularly like rural and urban infrastructure development which is the key to high growth. India is beginning to look forward and to some extent lead the developing economy. Focus on road development is like music to my ears. The Finance Minister has also tried to put the right focus on green energy, solar energy. I am particularly happy with the speed of implementation. Indians should now become impatient. All in all, it is a very forward looking budget

For the IT industry, the best news has been special additional duties- where companies were first paying and then claiming- the process is now scrapped. In the packaged software area, earlier we used to have double taxation, now only a one time tax will be charged which is a welcome move. Surcharge has been reduced from for 10 pc to 7.5 pc which means rate of direct tax will come down and this will give companies resilience to absorb some of the not so good aspects of the budget. This includes Countervailing duties and fuel prices which have been increased, thus, forcing freight cost to surge but the drop in surcharge will give companies some cushion without passing on the burden to consumers.

BUDGET FOCUSED ON OVERALL INFRASTRUCTURAL DEVELOPMENT ,

Navin M Raheja , MD , Raheja Developers
"THE budget presented by the Finance Minister is good for the Indian economy. We appreciate the decision of Finance Minister to continue the stimulus package. The budget is focused on the overall infrastructural development of the country including the rural sector. But the Finance Minister has not considered the real estate sector's major recommendations such as status of infrastructure to the industry, extension of tax exemption/tax rebate under section 80 IB up to March 2011, ECB for real estate etc. This would have helped the country to focus on meeting the housing shortage in the country as well as improving the overall GDP of the country. "
"Further, we had recommended that the central support under Rajiv Awaas Yogna should be passed to the party who is executing the project under PPP instead of passing the benefits to the state Government/agency which has also not been considered."

FOCUSED ON OVERALL INFRASTRUCTURAL DEVELOPMENT ,

Navin M Raheja , MD , Raheja Developers

"THE budget presented by the Finance Minister is good for the Indian economy. We appreciate the decision of Finance Minister to continue the stimulus package. The budget is focused on the overall infrastructural development of the country including the rural sector. But the Finance Minister has not considered the real estate sector's major recommendations such as status of infrastructure to the industry, extension of tax exemption/tax rebate under section 80 IB up to March 2011, ECB for real estate etc. This would have helped the country to focus on meeting the housing shortage in the country as well as improving the overall GDP of the country. "

"Further, we had recommended that the central support under Rajiv Awaas Yogna should be passed to the party who is executing the project under PPP instead of passing the benefits to the state Government/agency which has also not been considered."

THERE IS A LOT MORE FOR GOVT TO ANSWER

Chitra Awasthi,MD , Rit International

"WHILE I cannot resist appreciating the Finance Minister for more budgetary allocation to the Women & Child Welfare and School Education, there is a lot more that Government has to answer. Plan allocation for School Education raised from Rs 26,800 crore to Rs 31,036 crore in 2010-11 is though the most welcome step.

However, the Finance Minister has failed to make a policy announcement on the importance of primary education and giving concession to the private players.

While the government has been into a rhetoric to make India a financial super power for quite some time, it seems the Finance Minister has no concern with the country heading to be an illiterate superpower. As an educationist, I would have liked to see the Finance Minister announcing as to how more budgetary allocation to School Education would be implemented at the ground level, and inviting the private participation in the sector."

BUDGET - POSITIVE, GROWTH AND DEVELOPMENT ORIENTED : ASSOCHAM

Thesynergyonline Economic Bureau

NEW DELHI, FEB 26 :
THE ASSOCHAM president Dr. Swati Piramal while welcoming Budget proposals, termed them as Pragmatic, positive, growth and development oriented as these aim at attaining inclusive growth.

“The Finance Minister has performed the most balancing act under given circumstances by partially rolling out the Stimulus package and at the same time paid adequate attention for development of social sector and more specifically so for rural sector”, said Dr. Piramal.

Mr. Mukherjee has done his best in the budget proposals to fuel consumption and sufficiently incentivised renewable energy, infrastructure, research and development in health and equipped these sectors with reasonably higher allocations.

Dr. Piramal also welcomed a deadline set for introduction of GST and Direct Tax Code, pointing out that these would be major tax reforms which will not only provide tax relief’s to people and industry but also help the government realize higher tax collections.

According to ASSOCHAM, the budget proposals will bring in more money in hands of individuals as several good measures have been introduced in the Finance Bill in the form of tax relief’s to general public. Mr. Mukherjee for the first time in the recent history of budget presentation placed huge faith in the private sector which will come forward to building Indian economy and help it achieve higher growth in years to come.

The Chamber has also welcomed announcements for bringing in more and more services under the purview of service tax by not tinkering with it’s existing ceiling rate of 10 percent.

BUDGET WOULD HAVE BROAD APPEAL IN INDIA

Naresh Wadhwa, President and Country Manager – Cisco - India and SAARC

THE Budget this year would have a broad appeal in India, with a significant focus on inclusive growth and development at all strata. The emphasis on infrastructure development – both urban and rural - is both highly visible and highly welcome. It is heartening to see the significant rise in the allocation towards social welfare.

The ‘National Clean Energy Fund’ will position India as a leading force in finding ways to combat the imminent energy crisis. It will also simultaneously encourage research and technology projects in the clean energy space.

The proposed provision to simplify the FDI (Foreign Direct investment) model followed in India is also a welcome measure.
With the noble intention of spurring R&D across sectors, this budget paves the way for tax reforms on in-house R&D expenses, and also on contributions made towards scientific research to associations, colleges, universities and other institutions.

While research and development gets a leg-up, higher education and corporate tax reform waits for its turn. The UIDA took the lead among e-infrastructure initiatives, and broadband roll-out and major e-governance projects still needs to be addressed.

EPCES HAILS EXTENSION OF SEZ SCHEME

Thesynreregyonline Economic Bureau

NEW DELHI, FEB 26 :
WHILE presenting Union Budget 2010-11 Mr Pranab Mukherjee, Union Minister of Finance, recognized the contribution made by SEZs in India in bringing investment, increasing exports and creating employment.

He made a categorical statement that the Government is committed for ensuring continued growth of SEZs to draw investments, boost exports and employment. He stated that SEZs have attracted significant flow of domestic and foreign investments. He stated that in the first 3 quarters of 2009-10, exports from SEZs recorded a growth of 127 percent over the corresponding period last year.

Mr Anand Sharma, Union Minister of Commerce & Industry, while distributing export awards to EOU and SEZ units at a function organized by Export Promotion Council for EOUs & SEZs (EPCES) here recently had also categorically stated that we are continuously monitoring SEZ Scheme and would ensure that the Scheme is continued. I

In respect of draft Direct Tax Code, Mr. Sharma had stated that this is only a draft and had expressed confidence that the Finance Minister, given his experience, expertise and wisdom would take care of any issue arising out of DTC.

Mr R.K. Sonthalia, Chairman EPCES welcomed this statement from the Finance Minister and stated that this would help in allaying any apprehensions in the minds of international and domestic investors about the SEZ Scheme specifically in view of the draft Direct Tax Code.

Dr. L.B. Singhal, Director General EPCES stated that fiscal package provided for in the SEZ Act is quite comprehensive and competitive to the package provided elsewhere in the world. SEZ Act has been enacted for providing long -term stability and continuity.

However, a clear message was required from the Government of India that SEZ Scheme shall be continued in the manner provided for in the SEZ Act. Dr. Singhal stated that Hon’ble Finance Minister has given a very clear message that the SEZ Scheme is here to stay.

Mr R.K. Sonthalia, Chairman EPCES, however, urged that Income Tax benefit available to the EOUs under Section 10B of the Income Tax Act should be extended for another 3 years as EOU Scheme is complimentary to the SEZ Scheme and encourages only manufacturing and employment. EOU Scheme enables an entrepreneur to set up a unit anywhere in the country depending upon its geographical advantage.
February 26, 2010.

BUDGET WILL CONSOLIDATE GROWTH WITH FOCUS ON REFORMS : SCOPE

Thesynergyonline Economic Bureau

NEW DELHI, FEB 26 :
THE Union Budget 2010-2011 is high on consolidating economic growth while focusing on reforms for sustaining it in the long term. The Finance Minister has rightly focused on infrastructure, roads and railways, power, social sector with emphasis on rural development. "This balanced, broad -based approach towards consolidating the growth process and achieving inclusive growth is commendable", said Mr. Arup Roy Choudhury, Chairman, Standing Conference of Public Enterprises (SCOPE) and CMD, NBCC.

SCOPE Chairman said the Budget is likely to provide big boost to public sector companies in infrastructure, railways, road development, banking sector, power and energy sectors, health sector and social services as many PSEs are engaged in these activities.

Welcoming the government's policy of broad-basing the public sector equity as it will bring better governance in PSEs, Chairman SCOPE cautioned that market should not be flooded with the offerings from PSEs and it should be left to the managements of PSEs to decide when they should access the market so as to maximize the return from the market.

Recognizing the growth challenge that the country faced due to financial crisis of 2008-09 and noting the recovery process during the current financial year, Mr. Arup Roy Choudhury said that the Finance Minister has rightly opted for calibrated exit for fiscal stimulus, thereby guiding the industry in its revival efforts.

It is heartening that the government is committed to revert back to fiscal consolidation with lower fiscal deficit targets for coming years. It also needs to be complimented for maintaining its reforms agenda of introducing GST and Direct Tax Code from April 2011.

The Budget is pro-growth, pro-reforms with clearly identified targets. This should spur growth momentum further to reach double digit GDP growth in near future. Direct tax proposals are welcome. However, the concern on price front remains as increase in excise duty rates and reverting back to duty on crude and petroleum products may turn out to be inflationary. Also, increasing MAT would be a dampener for the industry sector.

A WELL-BALANCED BUDGET -INDEED FOR AAM ADMI

Dr. RP Singhania, Vice Chairman & Managing Director, JK Tyre & Industries

"THE Finance Minister has presented a well balanced Budget for 2010-2011 - indeed for aam-admi. It is supportive for the tax payers as realigning the slab limit will help in reducing burden on the tax payers. Its focus on development of agricultural on one hand, and infrastructure on the other, particularly at this critical phase of our economy is laudable.

While giving special emphasis on social sector specially the rural sector, he has done the obvious by partly withdrawing the stimulus package. I am sure, the Budget tabled today will bring about sense of optimism and induce higher growth in the coming year. While he has tried to contain the fiscal deficit, increase in the MAT rates is counterproductive. Tyre Industry is particularly disappointed that the inverted duty structure on Natural Rubber Imports has not been addressed for yet another year

GROWTH ORIENTED , NON-INFLATIONARY BUDGET

Kanwar Vivek, MD, Aditya Birla Money and CEO Aditya Birla Money Mart

"THE Budget is growth-oriented and non-inflationary, and therefore, it promotes further savings and investments. The markets will benefit from the return of fiscal discipline and also the renewed thrust and focus on infrastructure, power and PSU disinvestments."

The Union Budget has many features, which makes it growth-oriented and pro-reform. By bringing down the fiscal deficit from 6.9 per cent to an estimated 5.5 per cent level for 2010-11, it has brought fiscal discipline back on the agenda. The reduction in the net government borrowing programme, from Rs.397,000 crore to Rs.345,000 crore , will be a relief for the fixed income markets as it reduces the pressure on interest rates that would have come from this factor.

The thrust on infrastructure is enhanced with greater support coming from increased allocation and also more refinance from IIFCL. Refinancing for infrastructure projects by IIFCL, doubling of allocation for power sector, 13 per cent higher allocation for roads, and a greater thrust on public- private participation etc. are some of the positive measures. This stress on infrastructure is required to take the Indian economy to 9 per cent or even 10 per cent growth.

There is a clear path forward for PSU disinvestments, the target being hiked from Rs.25,000 crore to Rs.40,000 crore.

There is no major change in the basic tax structure. The rationalization of the tax slabs and the abolition of surcharge on income tax, increased allocation to NREGA, rural development programs etc. would ensure robust retail demand. Capitalization of PSU banks, likely licensing of private players or NBFCs in commercial banking, proposal for setting up of the financial stability board etc. sets a direction for the economy and the markets. T

he budget in therefore, is growth-oriented and reform oriented, while being non-inflationary. It addresses the requirements of growth with stability.

BUDGET WOULD HAVE SIGNIFICANT FOCUS ON INCLUSIVE GROWTH

Naresh Wadhwa, President and Country Manager - Cisco - India and SAARC

THE Budget this year would have a broad appeal in India, with a significant focus on inclusive growth and development at all strata. The emphasis on infrastructure development - both urban and rural - is both highly visible and highly welcome. It is heartening to see the significant rise in the allocation towards social welfare.

The 'National Clean Energy Fund' will position India as a leading force in finding ways to combat the imminent energy crisis. It will also simultaneously encourage research and technology projects in the clean energy space.

The proposed provision to simplify the FDI (Foreign Direct investment) model followed in India is also a welcome measure.

With the noble intention of spurring R&D across sectors, this budget paves the way for tax reforms on in-house R&D expenses, and also on contributions made towards scientific research to associations, colleges, universities and other institutions.

While research and development gets a leg-up, higher education and corporate tax reform waits for its turn. The UIDA took the lead among e-infrastructure initiatives, and broadband roll-out and major e-governance projects still needs to be addressed.

BUDGET WILL PROVIDE FRESH IMPETUS TO INVESTMENT, CONSUMPTION DEMAND

Chanda Kochhar, MD & CEO, ICICI Bank

THE Union Budget for FY2011 will provide fresh impetus to investment and consumption demand in the economy and promote infrastructure development on a larger scale. The focus is on supporting the growth momentum of the economy and addressing long-term constraints to growth.

At the same time the Budget continues with the government's plan to improve systemic efficiency through a simplified tax structure. Further the renewed focus on fiscal consolidation, in light of economic recovery, augurs well for the economy over the long-term. The budget, while highlighting the strong fundamentals of the economy, therefore, presents a balanced approach towards long-term economic planning and short term considerations of sustaining and broad-basing the momentum in economic recovery.
The Budget is a balanced exercise in policy making that focuses on leveraging the strong fundamentals of the Indian economy, providing an enabling environment for the growth process and facilitating broad-based and inclusive growth while at the same time committing to better fiscal management and prudence.

The Finance Minister has articulated that while regaining 9 percent growth momentum at the earliest is a priority, the endeavour would be to cross the double digit mark in the near future. As such the budget is oriented towards enhancing the long-term growth fundamentals of the economy.

The Budget lays emphasis on expenditure in sectors like agriculture, infrastructure development, rural and urban development and development of clean technology. The implementation of these development programmes will go a long way in addressing supply constraints in the economy, improving productivity and enabling sustained long-term economic growth.

With respect to taxes, the budget continues to focus on simplifying the country's tax system and making it more broad-based with the intention of implementing the direct tax code and GST regimes from April 1, 2011. At the same time, the reduction in tax slabs for income taxes is expected to result in greater disposable incomes in the hands of individuals leading to greater consumer spending and demand. The increase in the excise duty and removal of certain exemptions on the indirect tax front were largely expected and are in line with the government's articulation of focusing on fiscal consolidation.

The overall focus of the government on improving its fiscal position and increasing fiscal transparency is highly commendable. The Finance Minister has announced medium term targets for the fiscal deficit, with the fiscal deficit targeted at 4.1% in FY2013. At the same time he has articulated bringing items like oil and fertilizer subsidies, so far considered as off-balance sheet, into direct fiscal computation. This movement towards better fiscal management and transparency will increase efficiency in the economy, improve India 's attractiveness as an investment destination and provide the government greater fiscal flexibility to deal with any future economic shocks.

FY11 BUDGET MARKS BEGINNING OF PATH OF FISCAL PRUDENCE

Sandesh Kirkire - CEO, Kotak Asset Management Company

"THE FY11 Budget marks the beginning of the path to fiscal prudence for the Indian Government. The reduction in the fiscal deficit to GDP ratio to 5.50% is very positive and leads to a lower net borrowing for the Government. This is very positive as it would not crowd out the private sector requirement.

Further the Government is also targeting a fiscal deficit of 4.8 percent and 4.1 percent for FY12 and FY 13. This would also improve India 's sovereign standing in an increasingly uncertain international environment. The flow of capital into India should increase significantly on the back of this fiscal consolidation.

The gradual withdrawal of stimulus indicated by the 2 percent rise in excise should protect the growth uptrend. This rise in excise would marginally get balanced with the higher surplus in the hands of the consumers due to the raising of tax slabs.

The Government's intent to move to the Direct Tax Code and the GST from FY 2012 is very positive. The setting up of an apex level Financial Stability and Development Council would address the issues pertaining to Multi regulatory arbitrage in the financial markets. Overall the budget is pro growth and positive".

A POSITIVE STEP IN GROWTH OF REAL ESTATE SECTOR

Kabul Chawla, MD - BPTP

THE Budget is stable for over all economic development. We welcome finance ministry announcement of Sops for real estate, housing projects extended by a year and one-time interim relief provided to the housing & real sector projects. . Norms for built up area for shops in residential projects have also been changed to benefit residents

We welcome the positive step in the development of real estate development sector such as provision of scheme of one per cent interest subvention on housing loan upto Rs.10 lakh, where the cost of the house does not exceed Rs.20 lakh - announced in the last Budget - extended up to March 31, 2011. Thus, the cut in interest rates has an will help in reducing EMIs of borrowers & create an additional demand for low cost housing. Thus, overall the budget will contribute to infrastructure development in India .

BUDGET WILL CONSOLIDATE GROWTH WITH FOCUS ON REFORMS : SCOPE

Thesynergyonline Economic Bureau

FDI INVESTMENT IN FRONT-END RETAIL TO BOOST GROWTH

Raj Jain, Managing Director and CEO Bharti Walmart

"IN light of the Union Finance Minister's statement today that underscores the need to reduce the significant wastages in storage and well as in the operations of the existing food supply chains in the country, we are optimistic that India's progressive Government will move ahead with its policies of economic and social reforms, including allowing FDI investment in front-end retail.
This would greatly contribute to India's growth story by creating employment, strengthening supply chain efficiencies, enhancing earnings of farmers and helping families to save money so they can live better."

EXTREMELY ENCOURAGING TO REAL ESTATE SECTOR

Aditya Bansal , MD, ABW Infrastructure

THE Budget 2010 is extremely encouraging to the Real Estate Sector. Government has taken special measures to uplift this sector which has been reeling in the after math of the downturn.

Allocation of funding to the amount of Rs 1.74 trillion for infrastructure development and Rs19894 cr allotted for road infrastructure projects will allow much greater opportunity for Real Estate development in the coming year. Furthermore the increase in investments through Indira Awaas Yogana and Bharat Nirman Yojana will boost housing and commercial investment by enhanced infrastructural development.

In addition to this, the broadening of the tax slabs will benefit majority of the individual tax payers and therefore lead to larger availability of disposable incomes. This in turn will intensify demand for affordable housing which has constantly been on the rise and its buyers will stand to gain with this move. Although interest subvention on loans upto 20 lacs is definitely welcome but we feel that the bracket of rebate amount should have extended from current Rs 10 lacs to Rs 20 lacs since all the housing in this range falls in the affordable housing segment. Additionally, the principal exemption on housing loans which was expected to be increased to Rs 1.5 lakh from its current Rs 1 lakh deduction has not materialized.

Besides, if the Real Estate sector had been granted an Industry stature by now, the financing through banks would have been easier in this highly capital driven sector. Also opportunities for external borrowing would have magnified.

BUDGET WILL LEAD TO INCREASE IN FEEL- GOOD FACTOR

Ramesh A vaswani, ExecutiveVice Chairman , Intex Technologies

THE FM has done a commendable job of partially withdrawing the stimulus by balancing this with various schemes which should accelerate GDP growth. The focus on the rural economy with substantial & higher allocations will more than make up for the slack in demand, if any, due to the marginal increase in the excise duty rate.

This budget will lead to an increase in the feel good factor which is believed to play an important role in increasing the demand of consumer products.

It is very heartening to note that the cost of mobile phones will come down and will further boost demand and encourage local manufacturing.

I am disappointed, however, by the lack of adequate attention to promote the local manufacturing of IT hardware and to increase domestic consumption of PC.I feel that the economy now requires for inclusive growth not only inputs in agriculture and rural infrastructure but also in IT literacy and IT infrastructure.

India has been talked of as a knowledge economy. And a knowledge commission was also set up to chalk out various initiatives. The small increase of weighted average expenditure deduction on in-house R & D from 1.5 to 2 % only encourages ongoing R & D activities. The FM could have thought of additional incentives to lure large foreign corporations and research institutions to set up their facilities in India.

SCHOOL EDUCATION BUDGET ALLOCATION A BIG STEP FORWARD

Sachin Dev Duggal, President & Chief Executive Officer, Nivio

"THE decision to hike the school education budget allocation to 31,036 crore is a strong signal and even more a very big step forward; this sets the tone for the future. We need to invest heavily in education all levels of society so that as a nation we leapfrog forward. Needless to say; this utopia can only be realized with the optimum use of social and technological means; we hope the digital inclusion has space in this budget"

PERSONAL INCOME TAX RATE CUT WILL HAVE DIRECT IMPACT ON CONSUMER

Economist Siddharth Shankar.

"Overall the budget seems to have maintained a status quo. The reduction in personal income tax rate will have a direct impact on the consumer and he would be under less pressure to meet his daily needs. I do not see the consumption level going up drastically because there exists a huge amount of food inflation and that will continue to go up in the coming months. Rise in fuel prices will also add to inflation.

What is disappointing is the fact that nothing much has been done done to increase the agricultural production, which is core importance in the long run. Benefits like no service tax on transport or food grain would have no major impact on food inflation. Housing etc may not get much boost as was expected by industry. Larger coverage of service would add more services getting costlier. Rise in excise on cars could have been more."

A BUDGET IN THE POSITIVE DIRECTION

Andrew Horne, MD, Xerox India

"THE Union Budget for 2010-2011 is a budget in the positive direction. The impressive growth of the manufacturing sector in the third quarter of current year has reinforced that the economy is reviving but we need to move ahead with caution. With the continued support from Government on stimulating the economic recovery, the industry will be able to strengthen itself further. The Technology Advisory Group for Unique Projects (TAGUP) is a recommendable initiative of the Government and a step closer towards e-governance. In addition. For MNC's, simplifying the FDI policy would help to improve the overall investment environment.

For the common man, the reduction of customs duty, central excise duty and special additional duty in certain goods and commodities critical to SME's and SMBs' will be beneficial for the Indian household. The tax slab for the personal income and investment will also give a boost to the average mid level income group.

Overall, the budget has a vision to globalise India. "

MOSTLY A CALM BUDGET FOR IT INDUSTRY

Rajesh Janey, President, Sales, India & SAARC, NetApp

"This year's budget was mostly a calm budget for the IT industry. The good part is that it reflects strong flavor of social inclusion signaled by the focus on development fund and allocation for the education segment. This is a welcome move and bodes well for uniform social growth. The attention to infrastructure development is a continued note in the budget bouquet, and one that has shown results already."

BUDGET 2010-11 ADDRESSES FISCAL CONCERNS WITH APPARENT NO NEGATIVES

Gaurav Dua (Head of Research, Sharekhan ) Initial Reaction

Finance Minister has addressed the key issues of containing fiscal slippage and outlined a clear roadmap for the next three years. The net government borrowing program for 2010-11 is also well under control and allays fears of crowding out of bank credit for private sector. Tax proposals related to corporate and capital markets were benign and in line with expectation with no negative surprises. The thrust t on reforms and announcement like banking licenses for private sector non-banking companies were unexpected positive moves.

BUDGET 2010-11 A PRAGMATIC APPROACH

Sushanto Roy, CEO, Sahara Prime City

"I congratulate the Finance Minster for a very realistic budget. This budget goes on to prove present Government's pragmatic approach instead of a populist one. The Finance Minister, Mr. Pranab Mukherjee has chosen a very balanced approach in devising the Budget for 2010-11. Though there are not too many big bang reform-centric announcements, but what has come as a relief to the markets is the absence of major negatives, barring the hike in MAT, increase in excise duties and increase in the levy of oil prices.

Despite higher social spending, the government did not overshoot its FY10 fiscal deficit target of 6.8 per cent by too much. Also the Government has announced a roadmap to bring down the deficit in coming years with FY11 target at 5.5 per cent.

The focus of the budget on rural infrastructure, other developmental & employment generating schemes in rural India will ensure continuation of rural consumption demand which will help in economic growth.

I expect the realty and infrastructure sectors to gain from this budget. The infrastructure sector shall get benefited from higher government allocation and from the proposal of a deduction of Rs.20,000 towards investment in infra bonds. The realty sector would also benefit from continued focus on strengthening existing affordable housing schemes, extension of tax exemption period for real estate projects from existing 4 years to 5 years and extension of 1 percent interest subvention scheme on housing loan. All such measures will have positive impact on the real estate sector.

To summarize it, I will say that overall the budget has been positive for all the sectors. Though the Hon'ble Finance Minister has laid emphasis on consolidating the economic recovery, improving investment environment, inclusive development, strengthening transparency and public accountability, however it will be a tight rope walk for the government to deliver its promise of inclusive growth."

UNION BUDGET AIMED AT STRENGTHENING PILLARS OF INDIAN GROWTH STORY

Navneet Munot, CIO, SBI MF

"The Union budget is aimed at strengthening the pillars of Indian growth story which are consumption and infrastructural build up.

The government stimulus which helped the economy weathering the global downturn has partially been rolled back while paving the way towards fiscal consolidation. Accepting the recommendations of Thirteenth Finance commission and reduction in the fiscal deficit will go a long way in enhancing macro-economic stability. Fiscal deficit at 5.5 percent of GDP and net market borrowing for the next year are in line with market expectations and will sooth fears of crowding out and sharp spike in interest rates.

Measures on the taxation front and spending in key government programmes would keep the consumption story intact while some visible moves have been made to ensure increase in the pace of infrastructure build up. The long ranging reforms like roll out of GST, Direct tax code, financial sector reforms, subsidy reforms with better targeting through Unique identification Number, will assist in increasing the growth potential of Indian economy.

Though no major surprise, budget should be taken positively by both equity and the bond market. As the event is behind us, the market would now focus on cues from global markets, incremental economic data and corporate earnings."

A POSITIVE BUDGET , WIIL HELP ECONOMY LEAPFROG

Seemanto Roy, Head - Aamby Valley City and Sahara Entertainment Business

THE Budget presented by the Finance Minister is progressive and with help the economy leapfrog.
The relief announced for the real estate sector and the enhanced allocation for development of Urban & Rural infrastructure augers well for the Indian Real Estate Industry.

The emphasis on solar energy and setting up of the National Clean Energy Fund is also well timed and will make India a key player in supporting the cause of curbing Global Warming.

The Budget has something for everybody. His proposal to corporate surcharge from 10% to 7.5% and also the lowering of tax slabs on personal incomes will create a surge of demand and competitiveness in the market.

The creation of a unique symbol for the Indian Rupee like the US Dollar and the British Pound will give an enhanced and unique identity to our national currency.

A THRUST ON INCLUSIVE GROWTH WITH BALANCING FISCAL DEFICIT : NASSCOM

NASSCOM today welcomed the Union Budget Proposals 2010-11 terming it as progressive, long-term and providing the right thrust on social sector development, education, infrastructure, managing fiscal deficit, simplification of policies and convergence towards GST and Direct Tax Code.

Mr. Pramod Bhasin, Chairman, NASSCOM said, "We are delighted that the Finance Minister has recognized the key role our industry can play in driving technology led inclusive growth across the country, apart from directly contributing as an employment generator and foreign exchange earner. The announcement of the Technology Advisory Group under Mr. Nandan Nilekani, automation of central excise, GST and commercial taxes will enable the vision of citizen centric governance. Our industry will partner with the government to drive inclusive growth within India, while continuing to be the leader around the world in IT and business process solutions".

Mr. Som Mittal, President, NASSCOM said, "There are numerous positives for our industry in this budget, particularly on simplification. The removal of anomaly in Section 10AA of the SEZ Act and the Finance Minister's reaffirmation on the importance of SEZs will help the industry to take forward its SEZ plans across the country. The enhanced deduction on R&D investment will propel greater thrust on innovation and IP creation helping India to realize its vision of being the global R&D services hub".

He further added, "The reduction in personal income tax will greatly benefit the employees in our industry who will help to drive both enhanced savings and consumption within India. At the same time, the clarification on duty applicability for pre-packaged software as well as service tax refunds will provide the much necessary simplification of policies".

While overall the budget is positive, we are disappointed with the increase in MAT which will be a burden on small and medium businesses who are still struggling with the impact of the global recession.

There was also no move towards announcing parity of incentives between the STPI and the SEZ scheme which is again necessary for small companies and development of tier 2 and tier 3 cities. In line with our recommendation, the IT Taskforce formed by Department of Technology (DIT) had also strongly recommended that the STPIs be brought at par with the SEZs.

The tax benefits under the STPI Scheme are available till March 31st, 2011 and we will engage with the Government and through the Ministry of IT to represent for an equitable benefit to the SME sector.

UNION BUDGET DISAPPOINTS HANDICRAFTS EXPORTERS : EPCH

Thesynegyonline Economic Bureau

NEW DELHI, FEB 26 :
WHILE reacting favourably to the only point of the Union Budget for 2010 related to the Handicraft sector, Mr. Raj Kumar Malhotra, Chairman, Export Promotion Council for Handicrafts (EPCH) today thanked the Government for extending the concessional export finance regime for handicrafts sector for one more year till March 31, 2011.

Mr. Malhotra said that "Union Finance Minister Pranab Mukherjee's announcement for extending the interest subvention of 2 per cent for one more year is considered as a relief to exporters of handicrafts, handlooms, carpets and small and medium enterprises."

Earlier, the scheme was to expire by the end of the current financial year on March 31, 2010.

Council Chairman also expressed his disappointment for not considering the major issues of Section 10B (A) relief for exemption of Income Tax for handicraft exporters.

Also, the relief of Import Duty for tools and fixtures and a relief on Service Tax for the membership of the Councils and participation in the fairs and exhibitions have not been included in the Budget.

Mr. Malhotra stated that the overall impact of the Union Budget is not labour-intensive sectors friendly such as Handicrafts exports.

"These sectors were badly hit by the global economic meltdown and the extension of this relief by one more year would give them a new lease of life," he added.

Handicrafts sector provides direct employment to over six million people and during the economic slow down in the last two years, about half a million people had lost their source of livelihood.

EPCH is the nodal export promotion body in India under the aegis of the Ministry of Textiles, Govt. of India.

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Best viewed at 800 x 600 resolution with IE 4.0 or higher � Copyright 2010 : TheSynergyOnline.Com
Head Office : Thesynergyonline.com , Synergy House , 569/3, Chattarpur Hills , New Delhi-110074 (India) Tel : 09810878945 , 91 011 32440558 ; e--mail: editor@thesynergyonline.com , marketing @thesynergyonline.com , npsinha@thesynergyonline.com , npsinha2000@thesynergyonline.com ; npsinha2010@gmail.com