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This is really a consumption driven growth budget primarily focused on ‘Aam Admi’ in form of restructured income-tax slabs and excise duty cuts, both general rate and specific duty cuts. For a person earning Rs 10 lakhs per annum, the tax proposal reduces the effective tax rate by approx 4.4 per cent, which is quite significant. Both these proposals should significantly drive the consumption in the coming months. As far as corporate India is concerned no bad ne ws is good news. The proposals on enhancing the market for corporate bond market through tradability of equity option and debt separately for convertible bond should benefit the infrastructure industry and provide a fillip to growth of this product. The increased allocation to education in form of new IITs and setting up of skills development institute is a step in right direction.

The IT/ITES sector would definitely be disappointed with the non extension of the 10A tax holiday for STPI units. The sector should now focus on value added service offering and learn to compete with minimal governmental support. The tax exemption for reverse mortgage transaction should help banks with a new avenue for growth.

Ramkumar Krishnamachari, CFO

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No rollback of Budget proposals: Chidambaram

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