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‘Yawn… what a drag of a budget’

A budget with disappointment written all over it,” was the reaction from industries across Pune on Monday.

Written by Express News Service | Pune |
February 17, 2009 1:37:55 am

Damp squib : No tax or duty cuts for IT,no relief for auto sector; where have all the sops gone,asks Pune Inc.

A budget with disappointment written all over it,” was the reaction from industries across Pune on Monday. Sectors that were looking for major sops like IT and auto that generate maximum revenue from the region to the country’s kitty were left in the lurch with budget failing to deliver in their hour of need.

“The budget speech was mostly a recap of what has happened so far. The government missed the chance to revive industry. The 60 per cent refinance of infrastructure projects is the only silver lining; the social welfare increments are not of any significance,” said Mukesh Malhotra,president of Mahratta Chamber of Commerce,Industries and Agriculture (MCCIA).

The IT industry,which had hoped for reduction in service tax,extension of the Software Technology Park of India scheme and reduction of duties,tried to swallow the bitter pill. “Focus on higher education is a positive sign but there is no specific proposal for the IT sector. Reduction in corporate taxes,reduction of duties in hardware and focus on e-governance were expected but nothing happened,” said Deepak Shikarpur,chairman of MCCIA’s IT committee.

“The Finance Minister said extraordinary economic circumstances merit extraordinary measures. Now is the time for such measures. Unfortunately this did not translate into anything for the IT sector. The IT industry was eagerly looking for an extension to the tax holiday period beyond 2010. It ended up being a pure vanilla report card of government expenditure,” said Rajeev Gupta,president of Fujitsu Consulting India Pvt Ltd.

The auto industry and component manufacturers,too,were dejected by what the Finance Minister dished out or rather failed to. Nitin Bhave,managing director of Automag India Pvt Ltd,said,“After the interim budget,now there will be policy freeze for 3-4 months. It seems we cannot expect any good news from across the globe.”

Vikram Salunkhe,managing director of Accurate Engineering Co Pvt Ltd,said the auto sector in Pune and Chennai,hit acutely by the economic slowdown and,had been hoping to get some relief package. “But there is no good news for the sector,” he said.

PC Nambiar,director of Poonawalla Group Companies,said though the Finance Minister emphasised the need to bring tax rates down during this crisis period,no specific proposal to achieve this was announced. “The Finance Minister indicated that general sales tax will be introduced in 2010 but there is no clear roadmap to it,” he said.

Anant Sardeshmukh,additional director general of MCCIA,summed up the sentiment of the industry,calling the interim budget totally disappointing. “Some industry-specific incentives were expected. How are we going to address the slowdown till the regular budget is approved? The government was late in announcing revival packages and has missed the bus again,” he said.

Talking heads
A lacklustre budget. In the long term there was nothing to expect from an interim budget but the government could still have raised expectations of the people by reducing surcharges and increasing the buying capacity of the middle and lower income groups. Nothing was done except giving allocations to old programmes like the JNNURM and Indira Vikas Yojna. So nothing to appreciate and nothing to criticise either,I guess. The overall feeling its leaves you with is of disappointment.
Rahul Bajaj
Chairman and MD,Bajaj Auto

This is hardly a budget in the correct sense. It’s just a VOA so there was nothing quite expected from it for the finance sector,so there have been no disappointments. It was not supposed to touch individuals or give them income tax relief as all this will have to be done by the new government.
Dilip Apte
GM (operations),HDFC

It’s very unfortunate that no revival package for the economy was announced. The budget should have provided for this or at least given some kind of a direction. Last year we had a foreign exchange surplus of $ 300 billion most of which made the US treasury richer. We need to sell off these bonds and get this money back to India and increase the investment here. This is one of the many steps that the government should have taken.
Arun Firodia
Chairman and MD,Kinetic Motors

The real estate industry was hoping to get some stimulus; none were announced. The importance of infrastructure was clearly reflected by large outlays being allocated to various schemes like JNNURM,Rural Infrastructure Development Fund,Bharat Nirman Scheme,etc. Also an increase in viability gap funding for infrastructure projects is a positive. As always,outlays need to result in outcomes and I hope the government focuses on implementation with a sense of urgency.
Anshuman Magazine
CMD,CB Richard Ellis,South Asia Pvt Ltd

There were no great expectations for the IT sector – I am glad to see the continued focus on infrastructure and education which will be useful for us in the medium term.
Ganesh Natrajan
Director,NASSCOM

We are extremely disappointed. Waiting for the next government or budget to set the reforms rolling would be suicidal. For the real estate sector even a small stimulus could’ve given quick results. We had asked for immediate gap funding to complete current projects,reintroduction of 80 IB of IT Act. We also expected a big policy announcement on a special package for affordable housing that would be treated at par with Special Economic Zones.
Lalit Kumar Jain
President,Promoters Builders
Association of Pune

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