Budget 2012 fails to deliver short-term growth punch: India Inc SEZ News
MUMBAI: India Inc on Friday described the Union Budget as a mixed bag of long term pragmatism but lacking on the short-term front as increased tax burden on corporates will put pressure on their profitability.
Tata Consultancy Services CEO & MD N Chandrasekaran said, "given the economic and political circumstances, the FM has presented a pragmatic budget with doses of good intentions for long-term growth but lacked short term punch to get growth going. For the IT industry, the request to exempt SEZ income from MAT has not been granted and this is disappointing."
The focus on R&D is good as the weighted deduction of 200 per cent for R&D expenditure in an in-house unit has been extended beyond March 31 for a period of five years, he said.
There is no date or schedule for the direct tax code implementation and GST but the Government is committed to bring these in near future, Chandrasekaran said.
Tata Steel Managing Director H M Nerurkar said, "I rate Budget as neutral to positive. Given the current global and economic environment, the Government's target GDP growth rate of 7.6 per cent and commitment to bring down fiscal deficit to 3.5 per cent of GDP by FY14 are statements that hold a lot of promise."
The focus on infrastructure sector is in keeping with insatiable need for enhanced facilities. The country suffers from severe infrastructure deficit and any steps that are taken towards improving infrastructure are welcome, he said.
Special focus on increasing the share of manufacturing in GDP is welcome. Benefits on expenditure on R&D and skill development are positive steps for industrial development, he said, adding exemption of duties on steam coal, and coal mining project equipment will benefit the related industries.
"Overall, it is a Budget that strives to balance the current challenges and future expectations," Nerurkar said.
M&M President (Automotive Business) Pawan Goenka said against the backdrop of signs of an economic deceleration, the Finance Minister has delivered a Budget with good intent.
"Though there has been no big announcement on the rural side, the package of initiatives focusing on farm productivity, transportation efficiency, warehousing and micro-irrigation are all positive signs and augurs well for the economy overall as well as for M&M Group," Goenka said.
"The automotive sector is relieved that the FM did not take any retrograde step like imposing a tax on diesel vehicles. The excise duty hike was in a way expected and we will have to pass on the price hike to the consumer. With all the surcharges and special levies, the top excise duty rate is as high of 29 per cent," he said.