Financial Resource

sector.

The proposal to introduce special infrastructure debt funds to attract foreign financing in infrastructure will certainly help the robust growth of infrastructure sector in the days to come.

The Government`s target for spending Rs 2,140 billion in the infrastructure sector, accounting for about 48.5% of gross budgetary support of total plan expenditure and announcement of disbursal of loans worth Rs 200 billion by Indian Infrastructure Finance Company (IIFCL) are much needed incentives for the infrastructure sector.

P Kishore, managing director, Everonn Education

We congratulate the finance minister for increasing the allocation for education sector by a good 24% to Rs 520.57 billion and that of Sarva Sikha Abhiyan by 40% at Rs 21 billion will give the much needed boost to the education sector.We also welcome the government`s initiative to revamp the Centrally Sponsored Scheme `Vocationalisation of Secondary Education` to improve the employability of our youth.

The finance minister`s proposal to introduce a scholarship scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes IX and X is also praiseworthy as it would benefit about 4 million students.

He has also done well by making an additional allocation of Rs 5 billion to the National Skill Development Fund. We are extremely happy to note, as the minister said, that the National Skill Development Council (NSDC) is well on course to achieve its mandate of creation of 150 million skilled workforce two years ahead of 2022, the stipulated target year.

That the National Knowledge Network (NKN) will link 1500 Institutes of Higher Learning and Research through an optical fibre backbone by 2012 shows the Governments` inclination to reach quality education to the students irrespective of their geographies.

Education forms the backbone of economic development. We at Everonn are happy that the Government has been supporting the education sector with a missionary zeal. It is in this context that we view with happiness and satisfaction the budgetary announcements.

Pradeep Jain, chairman, Parsvnath Developers

For the real estate sector and infra sector, there are at least six major influencers: priority home loan limit increased to Rs 2.5 million from Rs 2 million; interest subvention of 1% on housing loans raised to Rs 1.5 million with cost of house upto Rs 2 million;allocation of Rs 580 billion to Bharat Nirman projects and proposal to set up Mortage Risk Guarantee fund for rural housing; creation of an Infrastructure Debt Fund to boost infrastructure funding and to increase Infrastructure spending by 23%; plan to allow FII limit in infrastructure bonds up to USD 25 billion; and as the government has also proposed a cut in the excise duty on cement and steel.

However, much more was expected to accelerate supply of affordable housing stocks.
Also, about MAT in SEZs, Government should not deflect from declared policy of tax exemptions, which gives wrong signal to investors in such projects.

There is nothing on 80 IA and 80IB of IT Act, which was expected. Also 30% to 36% of total value of a flat comprise of tax. We expected the Government to announce special schemes for affordable housing giving relief. We also expected relief and clarity through amendments for 80 IB (Housing) and 80 IA (IT Park). Supporting middle class through increasing deduction on home loan interest to Rs 2.5 lakhs was expected but this also did not come.

The Government, may, therefore, review the steps on the above so that benefits on SEZs, 80 IA, 80IB, increase in deduction of home loan interest to Rs. 2.5 lacs etc., are considered. At the end this can be said that the Union Budget is more growth oriented and will definitely help the Indian Economy record a double digit growth.

Peter Kerkar, director, Cox and Kings

The increase in service tax for air travel will not have a major impact on travel as the travel industry is growing at double digits and the hike is minimal especially for domestic travel. Air fares have been climbing for the last three months due to increase in fuel prices, but this has not deterred passengers from travelling.“
 

Sunil Godhwani, CMD, Religare Enterprises

Kudos, to the government and Finance Minister for speaking so long on a controversial issue like Corruption initially. It is certainly encouraging and heartening that the Government wants to tackle this issue head-on.

 As regards, the budget, it is a practical and incremental budget in continuation with the broader programme announced over the last 2 years, including taking steps towards achieving GST and DTC. Investors were very worried that they may become populist but that was certainly not the case.

Fiscal deficit target achievement of 4.6% for next year will be challenging given the high fuel prices and no 3G spectrum bonanza for the current year but the government is banking on good GDP growth rate for the current year and corresponding buoyancy in tax collections to achieve the same.

Manish Mandhana, Jt. MD, Mandhana Industries

Though his task of delivering a growth oriented budget was made tougher by the rising inflation concerns, but he could have definitely restrained from pleasing the individual tax payers at the expense of the growing and promising industry, especially sectors like textiles.

From a broader perspective, The MAT rate has been increased to 18.5 % from 18 %. At around 62 % of the full corporate tax rate of 30 %, I believe it is no more capable of being called a `MINIMUM` Alternate Tax !! MAT definitely needed to have been reviewed to bring it again to the earlier level of 15 %. The largest employment provider and one of the largest foreign exchange earner sectors, textiles, has clearly been overlooked. While we wait for the exact Allocation for TUFS scheme under budget, the TUF subsidy disbursement system definitely leaves much to be desired. There should be higher allocation and also speedy disbursement of the subsidy as the huge subsidy arrears blocks the precious working capital money. The biggest letdown comes from introduction of excise duty on branded garments & made-ups as this will hamper the growth of this rejuvenated segment and also expose the sector again to the excise department bureaucracy. With the recent unprecedented rise in yarn prices on the back of soaring cotton prices, the excise duty on cotton / polyester yarn definitely deserved rationalization. However, the budget is silent on this. There is also no information as of now on the extension of interest subvention of 1 % on export finance beyond 31st Mar, 2011, which is very important considering the recent rising interest rate scenario.

Sanjay Chamria, vice chairman & MD, Magma Fincorp

Lower fiscal deficit and lower than expected borrowings of government will definitely help in better liquidity and interest scenario for the private sector including AFCs. The FM has taken measures on rural housing by setting up of a Rs 30 billion fund, increased limit to Rs 1.5 million from Rs 1 million for interest subsidy and increased limits of priority home loans to Rs 2.5 million from Rs 2 million. All these will lead to overall growth of affordable housing and related core sectors such as cement, steel, transportation and financial services for these sectors.

Ajay Goenka, CMD of Rainbow Papers

The paper industries welcome the budget as announced by the government. Budget of the government is quite satisfactory. As per the notification, initial clearance up to 3,500 MT for recycled based waste paper units was at “Nil` duty has been removed, which would make no impact since no CENVAT Credit was allowed. The most significant change in the budget is reduction in the import duty for import of waste paper. The duty has been reduced from 5% to 2.5%. As a result of this, recycled based paper industries would be substantially benefited.

Sanjay Bhatia, MD, Hindustan Tin Works

It is indeed heartening to note that the projected GDP growth for 2011-12 would be between 8.75% and 9.2%. This means current growth trends will not only continue but will also accelerate. This would also give a demand push for FMCG sector as well as packaging sector.

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