Budget reactions from ANAND RATHI ,Pls Carry

Hi,

Pasted below are the Budget reactions from *Mr. Anand Rathi , Chairman ANAND
RATHI, Financial Service*
**
*Please feel free to use it *

*Budget views in 150 words:***

Overall, the budget maintains a fine balance between economic growth and
fiscal situation. Commitment to important economic reforms like introduction
of GST in 2010, divestment of PSUs above 51% government ownership and
encouragement of FDI / FII inflows (without specific details),
simplification and compliance of tax laws (new tax code, presumptive tax for
small businessman, SARAL II), are very significant features of the budget.
Removal of fringe benefits tax and surcharge on personal income tax, nominal
hike in basic exemption limit, continuing the reduced excise duty and
service tax will encourage spending. While increasing the allocation to
national highway program and urban renewal mission, the FM has in line with
the UPA policies, enhanced allocations for rural and agricultural sector
through irrigation, housing, bima yojna, electrification, roads, NREG and
cheaper farm loans. All these measures should result in GDP growth returning
to 9-10% band and fiscal situation improving due to improved infrastructure
and buoyant tax revenues in medium to long term.

*Budget views in 300 words:***

Overall, the budget maintains a fine balance between growth and fiscal
situation given the difficult circumstances. Being the first budget from the
new government, this should help lay a strong foundation for its five-year
term and should result in GDP growth returning to 9-10% band and fiscal
situation improving due to improved infrastructure and buoyant tax revenues
in medium to long term.

FM has intelligently attempted to keep most economic sectors and segments of
society happy by offering some benefits. Recognizing the continuing
difficult global economic environment, he has maintained the focus on growth
despite the unfavorable fiscal situation. Removal of fringe benefits tax and
surcharge on personal income tax, nominal hike in basic exemption limit,
continuing the reduced excise duty and service tax will encourage spending.
Commitment to important economic reforms like introduction of GST in 2010,
divestment of PSUs above 51% government ownership and encouragement of FDI /
FII inflows (without specific details), simplification and compliance of tax
laws (new tax code, presumptive tax for small businessman, SARAL II), are
very significant features of the budget.

While increasing the allocation to national highway program and urban
renewal mission, the FM has in line with the UPA policies, enhanced
allocations for rural and agricultural sector through irrigation, housing,
bima yojna, electrification, roads, NREG and cheaper farm loans. The focus
on inclusive growth continues by covering under-privileged through smart
card and engaging women through self–help group.

The media and the markets had raised excessive expectations on several
counts and feels disappointed in the short-term due to lack of removal /
reduction of STT and specific amounts on divestment, FDI and roadmap of
fiscal consolidation. Increased government borrowing may in the short-term
impact inflation and interest rates but the government could garner
resources from areas not announced in the budget like 3G spectrum auction,
higher divestment, increased FII and FDI flows etc.

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Regards,
Alpesh / Anirudh
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