The most positive and market-friendly Budget in years: PHD Chamber

New Delhi, February 26, 2010 –  While welcoming the Budget 2010-11, presented by the Hon’ble Finance Minister Mr. Pranab Mukherjee, PHD Chamber President, Mr. Ashok Kajaria, said that this is a positive budget for the industry with no surprises in it. The provisions go a long way to reflect the Government’s commitment to satisfying the aspirations of the “aam aadmi” through social sector programmes even while striving to revive growth in the economy and addressing the problem of fiscal deficit.

The budget is a move forward on the path of fiscal prudence with focus on the infrastructure investment in order to continue with the growth momentum. 

Government’s continued focus on the infrastructure investment (Rs.1.73 Lac Crores) under various schemes like Bharat Nirman would lead to a broad based growth with grater dispersal of money across the levels to have an inclusive growth   

The budget tries to bring down the fiscal deficit substantially to around 4.1% in next two years. Also the government’s effort to reduce its borrowing programme to Rs.3.45 lacs crores this year from Rs.4.6 lacs crores would contribute substantially to this effort. The disinvestment target of Rs.40000 crores would add substantially towards reducing the deficit and bring in better fiscal prudence. 

The change in the tax slabs would lead to generation of additional funds. These funds which will get into the hands of Indian middle class, would lead to higher consumption, savings and investments simultaneously.  

PHD believes that the increased consumption would lead to continued growth for the industry and economy as a whole. While savings will get channelized towards the infrastructure investments. 

The move allow to more banking licenses to be issued by RBI, both to the  private players and NBFC’s would act in industry’s favour with more competition leading to better cost and services.  

There is still a lot of focus on everything that would stimulate domestic consumption...which is going to lead us to a higher growth rate."

In term of negatives, the one thing is the increase of MAT by 3% to 18% which could hurt the industry. 

Overall a good positive budget

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