Sitting with a few economist friends, during the night of 5th July( 6th July in India), in the campus of UCLA, California, we found despite a bold budget provisions announced by the Finance minister Pranab Mukherjee, aiming at higher growth and making provision for better domestic consumption the budget never looked populist and might not enthuse the share market immediately. However it is one of the complicated, wise and intelligent budget in recent years, we all agreed.

The budget is a balanced budget. The actual impact of the budget would be seen in time to come. The knee jerk reaction of market is not the real worth of the Budget. It is a budget of wisdom. It does not show the fruit immediately. It is an indication of maturity of Finance Minister who without spelling in populist language have really conveyed the new structure of the steps to be taken in time to come. The result would be amaging by the time year 2014 is reached. May be result of this budget would be reflected by the year end or early next year.
The Fiance minister aimed at 9% inclusive growth rate over the years, abolished STT( transaction Tax) in shares and commodity. The infrastructure sectors have been given due importance. There is nothing new in corporate taxes but that should not have been negative impact.

The finance Minister also gave some relief to senior citizen, women and general public. The recommendation of the finance minister in respect of fertilizer to farmers directly is noteworthy. The finance minister intent on agriculture was shuttle but positive.

The finance minister have clearly stated that Banking and insurance would remain in public sector. This is good move. But have not liked by most of the specialist economist. But if we notice even in open economy of America banks have come under government control following recession, aftr accep0ting stimulus package from Obama administration. Some of the banks have started paying back the money to get out of government control here.But in India pople are hapy if the banks are kept in governmental control.

This is a very intelligent budget. This is not a popular budget but a wise budget since there is clear signal that the country is going to have better fiscal control. He kept the expenditure going. rationalization of tax cannot be done in a short time. It is reformist move. Announcement of new tax code is a good direction. The rise of MAT from 10% to 15% is hurting the sentiments rather than real loss to corporate. It is extremely tax reformist.

I am delighedt FBT fringe benefit tax) has gone. It never helpped government but created lot of bad blood in the corporate sector. The finance Minister has has given 45 days time for new code of inocme tax.. The market is over reacting on MAT. The disinvestment have not been quickly brought in and also it has not been clearly mentioned clearly how how much disinvestment he would like to do. i. But that could be more professional approach than political. It is now apparant that there would be disinvestment without sacrficing the government control. May be in due course of time ther would be disinvestment upto maximum of 10% of government undertaking's share. The market has not liked it as it has not been clearly mentioned. There was ofcourse enough indication in this regards.

During last thirty years fiscal deficit have been always 10% every year. The finance minister has tried to bring it down now. This is a good signal. According to us at Los Angles the budget is very intelligent budget though popular views may be different.

Many of us feel that exemption of tax on pension benefit is ging to be a far reaching
proposal. This point has to be noted because pensioner would be greatly benefited in due course of time. This is because the new pension scheme would be applicable to common persons also.

The senior citizen would get from now onward exemption limit of Rs 2.40 lakh, women would get Rs 1.90 lakh and general public would get Rs1.60lakh. This would give substantial benefit to common IT payers.

Perhaps abolition of Fringe Benefit Tax would give a brighter smile to corporate sector though no corporate tax has been reduced.


During the course of our discussion we all agreed that It is a futuristic budget which has aimed for the betterment of society and poorer section of people. We were sure that market leaders may have reacted in haste , like a anguished small school boy who have not been denied a lollipop, but it bound to bounce back soon as the implications and real intention of the finance minister would be clear to them.

We all concluded in our discussion that this a progressive and very intelligent budget ushering in a new era of fiscal and budgetary control.

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