India Inc welcomes budget 2011-12 (Roundup)

NEW DELHI/MUMBAI - Assurance to roll out the much-awaited Goods and Services Tax (GST), higher export duty on iron ore, foreign investment in equity mutual funds — the budget proposals were welcomed by India Inc Monday though some said the service tax on hospitals and hotels would add to the costs.

Some of the reactions to the general budget presented by Finance Minister Pranab Mukherjee in the Lok Sabha Monday were:

Sanjay Chandra, managing director Unitech Ltd: We welcome the measures announced in the budget to promote the development of affordable housing. Measures such as expanding the coverage of interest subvention to a loan of Rs.15 Lakh for a house costing Rs.25 Lakh, providing 100 percent deduction in respect of capital expenditure incurred on development of affordable housing, will certainly aid in boosting the demand and development of affordable housing in the coming months.

Adi Godrej, chairman of Godrej Group: The most important thing is that he (Pranab Mukherjee) has clearly given a signal of GST (Goods and Services Tax) coming through soon. That is a major development which is very welcome as it will help solve a lot of macroeconomic issues, including inflation, fiscal deficit and help GDP growth.

Naina Lal Kidwai, country head of HSBC group in India: The government borrowing is slightly at a level lower than what the markets had expected at Rs.345,000 crore. A number of the steps that have been taken to put money into the hands of the people in the lower income brackets is a very favourable stand.

C.S. Verma, chairman of Steel Authority of India (SAIL): Higher export duty on iron ore has been a long pending demand of the steel industry and the budget has taken care of the issue by increasing the export duty to 20 percent. This should ensure higher availability of iron ore for the Indian steel industry.

Madhu Kela, chief investment strategist of Reliance Capital: Foreign investment in equity mutual funds is a big positive for the market.

Amit Ray, president and chief executive officer, flexible packaging business, Uflex Limited: Within his constraints, he (finance minister) has presented a good, well balanced budget. However, the boldness and paradigm shift that was required at this juncture is missing. It is disappointing that there was no mention of handling black money issues and channelling it back into the economy to support infrastructure and social upliftment programmes.

Uday Kotak, executive chairman and managing director of Kotak Mahindra Bank: The budget has been a positive surprise. If the fiscal deficit is brought down to 4.6 percent and the trend continues, there will be greater fiscal consolidation.

Karl Slym, president and managing director of General Motors India: The government’s intention to reach consensus with states and introduce GST bill in the current session of parliament, introduction of Direct Tax Code (DTC) by April 1, 2012, setting up of national mission for hybrid and electric vehicles are welcome decisions.

Jagannadham Thunuguntla, strategist and head of research of SMC Global Securities: Although on the disinvestment front in this fiscal year the government fell short of the target, they have shown the momentum and aggression by maintaining Rs.40,000 crore target for the current year also. This is encouraging.

Navin M. Raheja, chairman of Raheja Developers: Overall, the budget is good for the general public. But it fails to the expectations of real estate and SEZs (special economic zones). Also, imposition of service tax on hospitals and hotels will add cost to basic necessities. The minister has not considered any of the demands of realty sector.

Gautam Thapar, president, chairman and chief executive officer, the Avantha group: It is a fairly positive budget as it takes care of the needs of growth and fiscal consolidation at the same time. The finance minister has strived to set the pace for double digit gross domestic product growth by protecting the economic sentiment.

Damien Marmion, chief executive, Max Bupa Health Insurance: This year’s budget has kept the interests of the common man in mind. Increasing of the income tax exemption limit from 1.6 lakhs to 1.8 lakhs, special concessions to senior citizens on taxation, increase in fund allocation for the infrastructure, education and health sectors, no increase in service tax and central excise duty along with a thrust of Rs.58,000 crore.

Amitabh Singh, chairman, Amcham’s Committee on tax, tariff and regulatory affairs: The budget proposals are indicative of the government’s priorities — boost agriculture production, attract more investment into infrastructure, promote adoption of environment friendly products and technologies. While a lot can be done in each of these areas, these steps convey an important message.

Gautam Adani, chairman Adani group: The finance minister has nailed the crucial issue of infrastructure funding, which has plagued the country for several decades by announcing several measures to enhance capital inflow in Indian infrastructure.

Suresh Senapaty, executive director and chief financial officer, Wipro: Having taken a challenging target of 4.6 percent for fiscal deficit, the budget leaves little legroom for any slippages on account of crude and even the current under-recoveries are left open to be ironed-out by itself over the next 12 months.

D. Shivakumar, vice president and managing director, Nokia India: The extension of special additional duty on components for mobile phones for another year is a welcome step.