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.

Terming the Union Budget 2010-2011to be ‘developmental’, Sh R K Saboo, Past President, PHD Chamber, complemented the Finance Minister for presenting a very balanced budget.

Commenting on the outlay for infrastructure, health and education sectors, Sh Saboo said, “Recognizing that India may be doing economically well, but in human development index, we are quite at the receiving end, that is where the Finance Minister has laid special emphasis.” Had it not been for inflation scene in India, the budget would have been more towards these needy sectors.

Sh Satish Bagrodia, Immediate Past President, PHD Chamber said, the FM had done quite a balancing act with the kind of existing constraints of fiscal deficit. By allocating funds for infrastructure, housing, healthcare and education sectors, the FM has indicated the importance of these sectors.

“With 46 per cent of the total plan outlay in the Union Budget earmarked for the infrastructure sector, the Finance Minister indicated that government was poised for infrastructural development of the country”, said Sh Ashok Khanna, Past President, PHD Chamber.

The FM’s proposal to extend subvention support, requested by the industry, for one more year for exports covering handicrafts, carpets, hand—looms and small and medium enterprises (SMEs) was welcomed by the industry.. However, MAT could have been left alone. The government proposed to extend the concessional export finance regime for select exporters for one more year till March 31, 2011, thus giving the slowdown-hit sector further relief.
Sh Dalip Sharma, Regional Director, PHD Chamber said, with credible measures for improving investment climate, strengthening infrastructure and fiscal consolidation, right allocations have been made in social sector which would ultimately put India on growth trajectory.

He said the budget aimed to reduce the fiscal deficit from the present 5.5 per cent to 4.8 per cent and to 4.1 per cent in the next three years and increase the GDP growth rate from the present 8.5 per cent to 9 and ten per cent.

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.

Sh Amarjit Goyal, Senior Member Managing Committee, PHD Chamber said the industry demand of stimulus rollback in phases was accepted.

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