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The reduction in dividend tax and removal of surcharge on tax are welcome measures for manufacturing industries. "These are all macro level policy initiatives and the benefits will accrue to corporates in due course," responds Mr. A. Vellayan, director (Marketing), Murugappa Group, Chennai. The rationalization of excise rates and the possibilities of reduction in interest rates are positive action by the finance minister, he adds.


Mr. Suresh Krishna, chairman and managing director, Sundram Fasteners

"It is a good budget with a clear direction," commends Mr. Suresh Krishna, Sundram Fasteners Ltd, Chennai. Continuing further he says that for the first time, labour law reforms and downsizing has been addressed in the budget. "But the crucial point is in implementing the budget proposals," he adds.

Unlike other budgets, Mr. Yashwant Sinha, finance minister, has shown the direction and certainly it is not a concession giving budget, he opines.

Mr. B. Suresh Kamath, chairman, Laser Soft Infosystems Ltd

Domestic software companies have been given a short shrift in the union budget and this would discourage software companies to develop products and improve quality and service in the local market, complains, Mr. B. Suresh Kamath, chairman, Laser Soft Inforsystems Ltd, a Chennai based banking software company.

"If India is to achieve the status of the Global  IT superpower then Indian   companies must develop  and sell products globally. This year's budget is silent about product companies.," he adds.

Software sector must be seen as the sector to provide large-scale employment, especially in smaller towns. Companies providing employment to graduates and under graduates (excluding highly educated persons) and physically disabled people must be encouraged in all segment of the industry, including software.

Welcome measures of the current budget for software companies are dividend tax reduction to 10%, continuation of exemption of software services from service tax net, liberal education loan for higher studies and reduction of customs duty for import of hardware.


Mr Rohit Gera, director, Gera Constructions

The tax exemption on housing loans upto Rs. 1.5 lakhs (earlier it was 1 lakh) is an excellent step towards incentivising people to get a mortgage on a house for financing the same. The net cost of housing loans will now come down. In addition, the lowering of the interest rates for Government savings schemes (which form a floor for other interest rates) ought to see a lowering of mortgage rates which in turn will make home loans cheaper, thereby further helping the home loan applicants.

The increase in the deduction with respect to income from house property from 25 per cent to 30 per cent will increase post tax income for those entities engaged in renting of house property. This will help in increasing the investment into housing as an avenue of investment for income.

The mention by the finance minister to bringing the cement prices to a more rational level as the objective of bringing down the customs duty on cement is laudable. The reduced duty along with the surchage on customs (which have been removed), is positive and should help in making Indian cement rates move closer to the pre-increase days of November 2000. Merely reducing the rates of customs duty would not be the only factor in lowering the cement rates, but it is a clear indicator that the government recognises the need of cement as an important ingredient in the infrastructure areas, which have also received an impetus in this budget.

Cut in the excise duties on glazed tiles is a Positive move to help the glazed tile industry by bringing down the excise duty on glazed tiles. However, whether the benefits are passed on to the consumer entirely remains to be seen.

The thrust on infrastructure is extremely positive- infrastructure is extremely important for the nation, both from a trickle down effect to other sectors as well as for increasing the efficiency of business (as a result of good infrastructure). This thrust will push the infrastructure sectors and should see more construction activity for these infrastructure projects.

The government move towards using of IT by additional computerisation will definitely help the IT sector. In addition, the move of offering ISP and Broadband service providers tax incentives is also very good.

Importantly, the Finance Minister has succeeded in bringing the much needed feel good factor back in the economy. This in itself goes a long way in spurring the economy on.