MUMBAI: CNBC, the business and financial channel has lined up a series of pre and post budget specials. CNBC also held a post budget round table in Mumbai where leaders and experts spoke on the budgets pros and cons.
The six-part post budget show, Budget-The Reality show will have comprehensive reports and analysed the implications of the budget. The show will combine in-studio debates and comments from experts from all over the country. It will air from 3-10 March.
The following are some reactions from captains of the industry who participated in the discussions.
Bajaj Auto chairman Rahul Bajaj:
"Without substantially increasing the fiscal deficit he (finance minister) has taken care of the democratic aspirations of the people, the fact that elections are coming later this year and next year. Some people think that's a very negative thing to do. But here, I think, he has said that we are moving away from this exemption economy, maybe it will take two-three years or maybe this was the wrong year for that. But he has not changed the basic tax rates except for individuals and corporates.' Overall, it is a good budget."
Bharti Enterprises CMD Sunil Mittal:
"There is a big jump in service tax from 5 per cent to 8 per cent. The telecom industry actually caters to a large part of service tax collections by the government. We hope this will allow them to reduce the licence fee that they charge from the telecom industry because 8 per cent service tax and nearly 16% of the revenue share, which goes as licence fee, is too much for the industry to bear."
Ashish Guha of Lazard India
"The finance minister has not touched upon agriculture infrastructure. That is a miss. He has done a lot for the capital markets. On interest rate, for the industry, 1 per cent gone on mall savings rate. Despite being an election year, he touched upon fertiliser pricing".
TISCO MD B Muthuraman
"On infrastructure, the budget has been very good, which is going to be good for steel, cement. The finance minister made a small announcement that 25 per cent of the roads be made of concrete. Excise duty on cars, ACs are rationalised. This being an election year, I was not expecting a budget like this."
Enam Financial Consultants director Vallabh Bhansali
"The finance minister has put a lot more money in the hands of consumers and investors. He has done something on state finances, which are in a disarray. I'm pleased about that. In terms of misses, I wish he had done something on power reforms because half the state deficit is on account of power. Another miss which market men rue very much is the SBI FII limit."
"Health coverage announced for poor people is a good thing and if it can become a basis for social security, a lot of opposition to liberalisation can go down. The market was technically overbought. It has not understood the implication of the capital gains tax move. Maybe, the market did not want the dividend distribution tax."
Alliance Capital Management CEO Nikhil Johri
"The impact of budgetary announcements on the mutual fund industry will be quite positive. Dividends received in the hands of investors will now be tax-free and at the mutual fund level, there will be no dividend distribution tax for equity and equity-oriented schemes, and a 12.5 per cent distribution tax for debt schemes."
"This policy will henceforth make investments in mutual funds much more attractive for both retail and institutional investors. The relative advantages of mutual funds over other savings instruments such as bank deposits, etc, will focus significant attention on mutual funds, particularly when the interest rates on administered small savings schemes have been brought down." he added.
"The substitution of TDS provision by dividend distribution tax is also going to be operationally more convenient for industry. The removal of surcharge on personal income tax will increase the investible surpluses of individual investors, thereby increasing his allocation to mutual funds. The decision to set up a separate pension regulatory authority and to allow a defined contribution based pension system, is a very welcome step. Overall, the Budget is as positive as it could be for the Indian mutual fund industry." he added.
Godrej Consumer Products ED Hoshedar K Press
"'The budget has only partially met the expectations of our industry. The main positive is the reduction of the maximum rate of import duty from 30 per cent to 25 per cent. The reduction of IT surcharge may not help to stimulate demand for our flagging categories. The much needed reduction in excise duty did not come through except for rationalisation of alcohol-based toiletries. Thus, the budget has not taken the opportunity to take the business to a higher plane."
Zensar Technologies MD Ganesh Natarajan
" The big hits (of the budget) are Sections 10A/10B and infrastructure improvement because, today, the industry is attracting a number of people to come back from Europe and US. And, for them, good infrastructure in the country will be important. The small miss is the domestic sector because the government had announced last year that three per cent of spending would be on IT. We hope that a lot more will be done to make sure that spending happens, which would improve the state of Indian industry and the economy.
Vikram S Mehta of Shell Group
"There are two important developments. One, for the first time in several years the finance minister has focused on renewable energy. He has specifically mentioned a fund for research for solar energy and wind power. Second, he has reduced the customs duty on regassified natural gas from 25 per centto 5 per cent. This will be an impetus to the power sector. Also, it is a very realistic budget. He hasn't put out a number on disinvestment, which is very good because they haven't been able to fulfill that number. But, he has made his commitment known to is investment."
