Quote from Mr Praveen Toshniwal, Chairman, CII Western Region
And Chiarman Nivo Controls
Mr Praveen Toshniwal, Chairman, CII Western Region lauded the efforts of the
Finance Minister for presenting a balanced budget. The Budget proposes to give
a boost to the infrastructure sector, manufacturing sector, skill development,
the MSME sector and the social sector. The proposal to set up the India
Opportunity Venture Fund of Rs 5000 crore for the MSME Sector will assist MSMEs
to access finance and set up new units.
The Budget, however, has set no definite timeline for the GST. It has also not
been very specific on disinvestment issues.
Quote from Mr Pradeep Bhargava, Deputy Chairman, CII Western Region
and MD ,Cummins Generator Technologies India Ltd
The Finance Minister has got his basic objectives right while presenting this
budget. He has focused on bolstering MSMEs, highlighting the infrastructure
sector by expanding ECB funding options and on the overall inclusive growth
aspect by incentivizing the social sector. He has also offered support to
agriculture sector through several incentives. The special focus on low cost
housing and inclusive agenda also boosts the industrial and manufacturing
sector.
We must recognize that social and focused initiatives need to be financed from
within. The pressure to contain fiscal deficit is high. Hence, increasing the
excise duty and service tax by 2% was not entirely unexpected. It does
disappoint the industry but over time the new equilibrium will set in. Critical
for us in the industry is the efficacy, integrity and efficiency with which the
money generated through taxes is spent on the social agenda.
Quote by Ninad Karpe, Vice Chairman, CII Maharashtra State Council
& MD &CEO Aptech Ltd
Education and skill development received a major boost in the budget. Allowing
weighted deduction for training imparted in companies for skill development
will give a thrust to the skill development initiatives. The proposal to
introduce a credit guarantee fund for educational loans for poor students will
go a long way in enabling poor students to go in for higher education. This is
a major game changer from the earlier system of loans based on collaterals.
Quote by Anuj Puri, Chairman CII Real Estate Summit
and Chairman & Country Head- Jones Lang LaSalle Property Consultants
Affordable housing has received a fair amount of boost in the budget. Allowing
of ECBs in the sector and inclusion of affordable housing in the negative list
will structurally see developers move into this segment of Real Estate.
However, the budget has not given the much needed industry status to the real
estate sector and has not spoken about FDI liberalization in this segment which
is reeling under a severe liquidity crunch.
Mr. Vijay Hede, Past Chairman CII Goa Council
Managing Director, Pyramid Finance Pvt Ltd
Positives:-
1. For the first time the Finance Minister has pegged the subsidies to 2%
of GDP for 2013 and at 1.7% of GDP for the year thereafter.
2. To make the economic development inclusive it is proposed to deliver
the subsidy directly to the beneficiary cutting out leakages through
intermediaries. It is also proposed to have a computerized PDS system.
3. The Union Government is considering 49% FDI in aviation and the
progress is also being made towards consensus on multi brand FDI in retail
which could directly benefit the farmer.
4. Various infrastructure agencies have been allowed to raise 60,000
crores through tax free bonds which will expedite creation of robust
infrastructure.
5. The security transaction tax has been reduced by 20% which will make
secondary market transactions more efficient.
6. Full exemption on customs duty is granted for imports of coal which
will bring succor to thermal power projects.
7. A 4% duty import duty is imposed on import of gold which is a non
productive asset contributing significantly to current account deficits in the
current times.
Negatives: -
1. The fiscal deficit for the current year has moved up from 4.6% as
estimated last year to 5.9% and the same have been projected at 5.1% which
appears to be alarmingly high.
2. This high deficit accentuated by increase in the excise duties by 2%
will not help in taming of inflation. Under these circumstances it will be a
challenge to attain 7.6% growth target as proposed by finance minister.
3. The subsidy on petroleum products has been assumed at 43,000 crores
for FY 2012-13 from 68,000 crores for the current year, this implies that
sometime during the year the government will have to partially decontrol the
petroleum products. This could be a challenge in an environment where the
allies let alone the opposition are not government friendly. A problem in Iran
could accentuate attainment of the targeted growth.
In a nutshell, the Union Budget 2012-13 is in our assessment is very strong on
intentions however the strength on execution remains untested.
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