A balanced budget as far as common man goes. The highlight is the FM’s
commitment to restore the growth rate to 9%. The initiative for more
private sector participation is an indication of the Government’s
focus in removing bottlenecks for investments and projects. Government’s commitment to introduce GST (Goods and Services Tax) by
1st April 2010 is indicative of its desire to reform the indirect tax
system. Similarly, introduction of new direct tax code and making it
open for debate makes Government’s commitment to reform the direct tax
system apparent.
Industry was expecting a drop in corporate tax rate or at least
abolition of surcharge. No change in corporate tax has disappointed
the industry. However, the fact that Government has almost left
indirect taxes untouched is not disruptive and should be seen as
positive.
The budget has increased significant allocation towards infrastructure
including the Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
and on highway spending. This is a move in the right direction and I
believe we need to continue to allocate significant resources in this area for the next decade. FM has tried to boost the rural economy by
announcing several measures including broad basing National Rural
Employment Guarantee Scheme (NREGS).
As for JUSCO and similar urban infrastructure sector industries, the
increase under JNNURM grant would definitely give a boost to this
sector. Personally, I would have appreciated reforms in the water
sector, similar to what has been done in the power and telecom sector.
There is a need to treat water & waste water sector as a priority
sector for accessing debt especially when private sector participation
is being encouraged in this filed by the government. This would enable
service providers to give better service at affordable rates to end
users.
On specifics, abolition of FBT, abolition of surcharge on personal
income tax and increase in exemption limits of personal income, though
marginally, are welcome moves. Similarly, extension of tax holiday to
export oriented units by one year would be helpful although I believe
extension could have been granted for longer period.
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