Post Budget Comments from Corporate Honchos in Hyderabad

Suman Reddy,                                                
Managing Director,      
Pegasystems Worldwide India Private Ltd

"Unlike expectations it has turned out to be more of a populist budget and not very forward looking. Though there is some focus on infrastructure - the overall impact may not be high.

 
There is nothing in it for the IT industry in specific. The industry was expecting MAT reduction for SEZ units and Tax benefits for SME's in IT as we were hoping there would be some positive announcements for them to get encouraged, however the IT industry recommendations have been ignored in this budget.

What will be interesting is to wait and watch on how the government goes about implementing the education and skill development related announcements made in the budget - these initiatives will certainly have a positive impact regarding availability of skilled manpower in the IT industry.

From the common man's perspective, curbing headline inflation has been a positive point but the announcements do not seem to make a great impact on savings. "

Debasis Chatterji,
CEO, Netxcell Limited

“Considering the global and Indian economic scenario and the political situation, the finance minister seems to have delivered a status quo kind of a budget with a promise of something better in the future. Though there have been some exemptions on the tax front for the common man it is not likely to have much impact on savings.

Fiscal deficit does not seem to be very encouraging neither is there much reduction in the non-plan expenditure.

Infrastructure seems to have got some push with the focus on the spend and bonds that are being raised. However it is discouraging to note that there is nothing in it for the telecom players, the industry was hoping for some  direct and/or indirect tax benefits for telecom sector and any  incentive to telecom value added service (VAS) companies would have been welcome and encouraging for the industry “

Mr. Varun Goel

Head - Equity PMS

Karvy Private Wealth 

Budget for FY13 came in on expected lines

The fiscal deficit number has been penciled at 5.1% for FY13. The provisions for fuel and fertilizer subsidies look inadequate and the fiscal deficit number would be closer to 5.5% in absence of meaningful hikes in auto fuel prices. The government borrowing programme at 4.79 lakh crore is quite high and would result in further hardening of bond yields.

Government’s focus clearly has been to shore up the revenue side with increase in Indirect tax rates.  We were expecting a slight increase in Service tax and excise duty which happened with the rate changing from 10% to 12%. The sectors which primarily will take the hit are from this will be automobiles, FMCG, toursim & cements. The government has expanded the service tax coverage by having a ‘negative List’ for service tax with all but 17 services becoming applicable for service tax.  No timelines have been given for implementation of Direct tax code and Goods and services tax (GST).

On the expenditure side, government has provided for Food subsidy of 75,000 crores and is looking to implement Food security bill in select 50 districts. The allowances for various other entitlement programmes have not been increased very meaningfully.

There was a lot of talk on boosting infrastructure activity but no concrete provisions have come in. A positive step for the power sector was abolishment of 5% import duty on Coal. This move will be positive for most of the power generating companies.

As far as the market is concerned, budget is a non-event. The market will start focusing on Q4 FY12 earnings which start from 10^th April and RBI policy in the third week of April.

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