Markets wilt as corporate taxes remain unchanged
06 Jul 2009
Finance Minister Pranab Mukherjee's Budget 2009 has come in as a disappointment for India Inc and the markets. The septuagenarian remained silent on key points like the revamp of fuel policy, corporate tax, and the disinvestment roadmap. Two things seem to have spooked the markets. One, the fact that fiscal deficit is seen at 6.8% versus 6.2% in the interim budget. And secondly, the hike in Minimum Alternate Tax to 15% from 10%.
The Nifty which rallied 20.5% from May 16 (the day the results for the general elections were announced) till June 6 has given a thumbs down to the Budget announcements. The Nifty is down 150 points at 12:54 IST.
India Inc disappointed:
Mukherjee left the corporate tax, customs and excise duty structure unchanged. However, he abolished the Fringe Benefit Tax which was the bugbear of the industry. Also, the deadline for Corporate India's demand for a rollout of Goods and Services Tax has been set as April 2010.
Mixed bag for markets:
The Finance Minister left the Securities Tax unchanged but scrapped the Commodities Transaction Tax.
Aam Aadmi cheers:
Budget 2009 hiked the personal income tax exemption limit by Rs 10,000 for men and women. The limit for senior citizens was raised by Rs 15,000. Besides this, the 10% surcharge on personal income tax has been scrapped.
