Finance Minister Pranab Mukherjee's Budget proposals for the financial year 2011-12 laid down a roadmap, which was clearly seen to be inching towards growth rather than treading on a feared track of withdrawal of the stimulus package. To that extent, I must say, it was a clear relief. All the trade bodies had, in no uncertain terms, conveyed it to the Government that any withdrawal of incentives provided under stimulus could be counter-productive under the prevailing global uncertainties. It was not accidental that Pranabda started his Budget speech by saying, "In a globalised world with its share of uncertainties and rapid changes, this year brought us some opportunities and many challenges as we moved ahead with steady steps on chosen part of fiscal consolidation and high economic growth."
Pending reading of the fine print, which would take sometime, the general reception of the Budget proposals, has been one of welcome, though not quite warm.
Describing Pranab Mukherjee's Budget 2011-12 as a "balanced effort to maintain the growth momentum", Rajan Bharti Mittal, President, FICCI said that the Finance Minister has presented a forward-looking budget at a time when the global economy was still looking fragile. He pointed out that in the greater interest of economic growth; the Finance Minister has avoided the temptation of raising excise duties, as was widely feared. "The Finance Minister seems to be banking on the economy going well and therefore has placed his hopes on revenues rising on the back of overall higher growth of the economy." He added that the Finance Minister has also announced steps for roll out of the GST and DTC. These will create a favorable environment for the corporate sector. While the reduction in the surcharge on corporate tax from 7.5 per cent to 5 per cent would only marginally reduce the tax burden on the corporate, the FICCI president said that the surcharge and education cess should have been totally abolished. In this context, he emphasized that in the competitive global business environment, the corporate tax rate should have been in the vicinity of the global average rate of 24.99 per cent.
The views presented in article are of the author; based on the latest verdict of Budget 2011-12