A cautious welcome from captains of industry

KOCHI: The tightrope between blatant populism and compulsive reform taken by Union finance minister Pranab Mukherjee in his budget presentation on Friday elicited a cautiously optimistic response from captains of industry.
The watchword of the Budget has been "investments", according to Geojit Financial Management Services Ltd Managing Director and CII Kerala State Council Vice-Chairman C J George.He was participating in a post-budget discussion convened by the Confederation of Indian Industry's (CII) Kerala chapter. "The budget has played up the investment agenda by focussing on roping in $1 trillion under the 12 Five Year Plan. Foreign investors need a good roadmap from the government on reducing fiscal deficit. Now, they have been allowed to invest directly in the capital and bond markets in India, which is a positive step," he said.
Federal Bank Managing Director and CEO Shyam Srinivasan said that the Budget "looks more credible and realistic" this time round. "There is a genuine intent and effort to boost revenues by hiking services tax and excise duty rates by 2%, from 10% to 12%). Subsidy management is likely to improve with reduction in pilferage through direct credit to end users` account. GDP is expected to be around 7.60% in fiscal 2013, which again is realistic when one looks at the current year`s growth. The disinvestment target of Rs 30,000 crore is also realistic and achievable," Srinivasan said.
He said that exemption of upto Rs 10,000 on income earned as interest on savings bank accounts, and interest subvention to farmers who are prompt in repayments are likely to have a positive impact on the retail customers of the banks.
CGH Earth CEO Jose Dominic said that while the accent of the budget was on agriculture and infrastructure growth, the impact on tourism would be substantial. "The Budget opens the possibility of raising Rs 45,000 crore for the tourism sector alone. The Rajiv Gandhi Equity Scheme is another enabling factor for industry, especially entrepreneurs who are looking out to raise capital and those in the micro and small enterprises," Dominic said. Tax expert Vivek Krishna Govind, a partner with chartered accountants Varma & Varma, felt that the Finance Minister had tweaked the direct taxes to gain around Rs 20,000 in savings for those in the salary bracket of Rs 10 lakh and above.
Full Coverage on Budget 2012: Budget 2012, Budget News 2012