‘Budget has the vision to transform India’
Kumar Mangalam Birla
Chairman, Aditya Birla Group
The Budget continues in the
direction set by the past few
for key sectors. Overall, the Budget is consistent with the
vision of transforming India into a major global econom-
ic player with equitable growth.
Sunil Mittal
Chairman, Bharti Group
Budget 2011-12 is clearly
high on intent to maintain
the growth momentum in
the economy. From the point
of view of industry, though
the minimum alternate tax
has gone up marginally,
reduction in surcharge on
corporate tax is a good step.
The FM had little choice but
to leave both direct and indirect tax rates untouched to
maintain revenue growth to
meet his fiscal deficit target. The rural broadband initiative to connect village panchayats is going to be an
important enabler in the nation’s governance. The proposal to introduce direct transfer of cash subsidy will help
plug the massive leakages. Mobile phones can ensure
secure, reliable and affordable cash transfer of subsidies
directly into the hands of the targeted people.
Chanda Kochar
Managing director and chief executive officer, ICICI
Bank
It’s a growth-oriented Budget that seeks to build on
India’s strengths. The Budget recognizes the long-term
growth drivers for the
economy and seeks to
strengthen them further.
Measures in this regard
include continued focus on
education and skill build-
ing to realize our demo-
graphic dividend and
increased infrastructure
investments through
measures like increasing
the foreign institutional
investor investment limit
in corporate bonds, lower-
ing of withholding tax for
infrastructure debt funds,
mechanisms to strengthen
PPP and addressing envi-
ronment related issues.
Overall, the Budget focuses on areas requiring significant
investments, while seeking to take forward the process of
fiscal consolidation.
India Inc analyses the Budget
2011
BUDGE T
Kris Gopalakrishnan
MD, Infosys
There were worries about
continuation of reforms and
the Budget addressed that by
giving a clear time frame for
introduction of big ticket
reforms like the New
Companies Bill, Direct Tax
Code and GST. There were
worries about the high current
account deficit and he
addressed to that to some
extent by liberalizing further
the foreign direct investment policy by allowing regis-
tered FIIs to invest in mutual funds while at the same
time increasing the limits for investments by FIIs in
unlisted corporate bonds by $20 billion. The inflation
was the core issue for common people, and he addressed
that by increasing the tax exempt slabs for individuals.
The biggest surprise for the markets was the lower fiscal
deficit and government borrowing next year.
Rakesh Jhunjhunwala
Stock investor
The good thing about the
Budget is the fiscal prudence
shown by the finance minister.
While his intention to keep the
government’s net borrowing at
Rs 3,430 billion ($76.22 billion) and fiscal deficit at 4.6
percent in financial year12
sends out the right signals, the
market is skeptical. On the
reforms side, no bold decision
has been taken, some of which
were much needed. On the positive side, the corporate sector was expecting a lot of
taxes, which would have impacted profitability. This has
not happened, so it is good for corporate India.
Kishore Biyani
Chairman, Future Group
The Budget has ensured that we are ready to deal with
the problems of efficiencies in production, distribution
and processing of agricultural produce. The FM has spo-
ken about reforming the
Agricultural Produce Market
Committees act, fuelling the
development of warehouse and
cold storages, etc. But from the
consumer point of view, the
Budget has nothing much to
offer. The relief of Rs 20,000
($400) in direct tax in no way
would affect his consumption or
spending power. One major seg-
ment of the urban poor, which
accounts for 20 percent of
India, has been neglected. The Budget is a serious blow
for the apparel industry, because of the conversion of
optional levy on branded garments into a mandatory levy.
Kaku Nakhate
President and Country Head,
Bank of America
On the balance of payment
side, the minister has opened up
two streams; one which is for-
eign investment in mutual
funds with proper KYC (know
your customer) and the $20 bil-
lion FII investment in corporate
bonds. This should help allevi-
ate concerns on India’s current
account deficit funding risks,
especially seen in conjunction
with the $7.2-billion inflow due to BP’s investment in
Reliance gas blocks.
From a mutual fund perspective it is another avenue to
raise and access funds, which was earlier possible only via
the offshore route. The increase in the FII limit for corporate bonds along with relaxation in withholding tax for
infrastructure bonds will go a long way in developing a
strong domestic corporate debt market.
Venu Srinivasan
CMD, TVS Motors
The government is moving
towards fiscal consolidation and
embarking on a discipline to
bring down deficits slowly. Also,
there is focus on green initia-
tives and creation of storage
facilities. Another key aspect
has been the announcement to
increase share of the manufac-
turing sector in the gross
domestic product. We assume
this would imply a wide range
of reforms in factory processes, in labor acts. Only servic-
es won’t be able to sustain the momentum in the econo-
my, manufacturing will have to play an increasingly
important role. Industrial competitiveness is important
for creating the 100 million jobs the government has in
mind over the next five years. The only way to counter
inflation is to resolve supply side constraints. On the
whole, it is a balanced and good budget.
Y C Deveshwar
Chairman, ITC
The finance minister has done
a brilliant job of balancing the
challenges confronting the econ-
omy and the opportunities that
can ignite faster growth. He has
sought to consolidate the fiscal
deficit through growth stimulat-
ed by moderation in taxes there-
by encouraging savings and
investment. The measures pro-
posed in the Budget to expand
the tax base would also provide a
more robust source of future revenue accretion and com-
petitiveness of the Indian economy. In addition, the FM
has provided a strong impetus to inclusive growth by sig-
nificantly investing in the long-term drivers of the econo-
my like education, skill development, infrastructure and
development of the rural economy.
