Mr Ishaat Hussain, Finance Director, Tata Sons
Currently, the economy is growing at 6.9 per cent. Industrial growth is robust. What this Budget has done is to ensure that the growth rates are not affected. Further, the underlying principle seems to be to bet on the economic buoyancy for revenue generation. The Budget has a strong focus on infrastructure investments, along with rural development and investments in the social sector such as education and healthcare.
These are indeed welcome measures. Not only would this improve the standard of living but will also lead to the expansion of the effective rural demand. The implementation of these programmes as pointed out by the Finance Minister himself is an area, which needs continuous monitoring. The proposed amendments in the banking regulations and RBI Act to ensure adequate liquidity in a growing economy are, indeed, in the right direction. However, one could have also examined the possibility of allowing NBFC's to play a greater role in catering to the industrial restructuring process.
With regard to tax proposals, reduction of the corporate tax will help in improving earnings, which can be utilised by the companies for further investments. Simplification of the new income-tax rules too will be welcome. The proposal to reduce withholding tax on technical services from 20 per cent to 10 per cent will help in the process of technical upgradation. Reduction of Customs peak rates should have been preceded by restructuring of the excise duties, otherwise it can affect domestic competitiveness.
However, certain areas need serious attention. These are: tax on the withdrawal of bank deposits over Rs 10,000 per day. How can individuals/corporates be taxed for keeping their money in the bank, which has already been taxed once?