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India Inc. celebrates Budget 2010 (View Comments)
Ankita Shreeram
Posted On Sunday, March 07, 2010 at 09:59:00 PM
India Inc. has a reason to celebrate as the budget provides many incentives for industrial growth
What with the turnaround from recession and encouraging industrial growth trends, the economic conditions of 2010 dictate a pro-industrial budget and the central government has more than lived up to the expectations.
Commenting on the provisions made for the IT and telecom industries, Rajesh Ghonasgi, Chief Financial Officer, Persistent Systems Ltd. says, “We welcome the Union Budget 2010 which is quite positive and balanced in its approach. However, it is a neutral budget for the IT & Outsourcing industry as the MAT hike may affect mid–size IT companies. As the government said that it is committed to growth of SEZs, it will make things easy for the IT sector, whether in the current Income Tax laws or the revised Direct Taxes Bill.”
Andrew Horne, Managing Director, Xerox India, feels that the budget will help industries grow further. “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.”
The manufacturing industry has been amply rewarded for its outstanding performance. Kumar Kandaswami, Senior Director, Deloitte India lists the favourable provisions:
• The allocation for infrastructure will not only support the manufacturing growth by increasing supply chain efficiency but also create demand for capital equipment and further help sustain demand
• Focus on innovation and R&D is critical for Indian manufacturing sector to do well in the long term. The recognition of that in the budget is satisfying
• The attempts to reign in fiscal deficit is good for manufacturing industry – while it may appear to put some tax burden on it in the short run
• During the last two years, the rural consumer bailed out many sectors of manufacturing through increased consumption. The continued support for social projects in the rural areas can only aid demand creation
However, Sudeep Malu, Managing Director, Sumatex Ltd feels that the budget could have accommodated better provisions for the textile sector. “Apart from an increase of 32% for the schemes for Integrated Textile Parks, Rs. 200 Cr. for Tamilnadu Textile sector, weighted deduction on expenditure incurred on in-house R&D enhance to 200%, launch of extensive skill development programme, it doesn’t contain any major provision/ allocation of fund for industrial growth and development. The decline in the TUFS assistance is a major negative for the textile sector.”
The pro-industrial bent of the budget can only mean good tidings for job seekers. “Budget 2010 is growth oriented and a balanced budget from an industry perspective. The good thing is that the government has not withdrawn stimulus package fully and sectors which still need the support will be given the same. The Finance Minister has given benefit to Small and Medium Enterprises (SMEs) sector in terms of exemption of advance tax, which will further boost this sector as it is the backbone of our economy. Besides, the decision to tap private talent in ‘Unique Identification ID project’ will create more jobs which in turn will boost up many industries indirectly,” explains Sunil Goel, Director, GlobalHunt India.
Summing up, Sudeep Malu, Managing Director, Sumatex Ltd says, “Union Budget 2010 is a pro-growth budget considering its focus on rural development, infrastructure, education, agriculture, irrigation, healthcare and social security schemes.” Thus, while it is always difficult to satisfy all industries completely, the budget has done a pretty good job of balancing its industry goodies.
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