The agricultural reforms mentioned in the Budget will accelerate the growth of agriculture, but the Finance Minister has failed to tax the rich farmers. The deficit would have been reduced if he had managed to involve rich agriculturists as well in the tax process.
The boost to infrastructure facilities in the Budget is welcome, but the downsizing measures hold no meaning. As against an increase of 25 per cent government recruitment in the past three to four years, his target of 10 per cent over the next five years is no reduction.
The government has spent Rs 13,000 crores on 23 PSUs while eight PSUs have been closed. Why spend money,? It is better to accelerate the process of disinvestment.
One fundamental issue that has not been mentioned is family planning. It should be treated as a national cause. It would be a good thing to give tax concessions and other incentives to companies that spend money on family planning.
Ravi Pandit, chairman, KPIT , and vice president, Mahratta Chamber of Commerce:
We can call this the dawn of fiscal responsibility. This time the commitment to stay within 5.1 per cent of the GDP has been met, and the target has been set to 4.7 per cent this year. We could say there is some reaching of sanity in fiscal matters. Rationalisation of interest rate and reduction of 1.5 per cent will help bring down the cost for the industry.
There is a clear move to reduce subsidies. The proposal to meter all power that is supplied, together with reduction in subsidies will help to decelerate government expenditure.
There is a definite boost to the IT industry in terms of computerisation of key government departments, tax exemption of 70 per cent for on-site IT services, and exemption in ESOP investment. Relaxation in mergers and acquisitions , reduction in duty on computer components to 15 per cent , all these too will help spur the sector.
Deepak Shikarpur, chairman of the IT sub-committee, MCCIA:
The Budget spells well for the IT sector. From the Finance Minister's speech it is clear that the Convergence Bill will be tabled soon, bringing together telecom, internet and television.
Companies listed abroad will now have the freedom to acquire new companies and grow.
The thrust on higher/engineering education and loan benefit for higher technical education will benefit IT education. And the thrust to IT literacy and the adoption of IT in e-governance will create a new domestic business for the IT industry.
Overall, it is an excellent budget for the IT industry.