'Overall union budget is balanced' – Mr Manish Mandhana

17 Mar '12

3 min read

“Overall the Union Budget is balanced. The Finance Minister has not done anything reformative with the budget, but at the same time he has refrained from taking any adverse measures which could have dampened the sentiments further”, said Mr Manish Mandhana, Joint Managing Director - Mandhana Industries Ltd.

Mr Mandhana was reacting to the Union Budget announced by the Finance Minister – Mr Pranab Mukherjee. “Though the budget is non-eventful but, it could have been worse given the current scenario. According to me, he has refrained from taking any major adverse step”, he observed.

He said, “He has provided some relief, though minimal, on the individual tax front. Obviously the hike in excise rate and service tax was inevitable because these are inherent taxes and major sources of revenue for the government. He has been pretty transparent about the target for the fiscal deficit. So that's where I really respect him because we have to face the reality of the current fiscal deficit.

“Last year was tough for the entire world and India was no exception. The fiscal deficit has gone up to 5.9%, still I think, we are still in a much better shape than other major economies of the world. If it comes down to 5.1% in the current year, as projected by him, then definitely it will be a good time for the economy.

“Now the government as well as the RBI will have to take further steps in reducing the rate of interest which can really fuel the growth rate. If the GDP has to grow as projected from current 6.9% to 7.6% and then 8.4%, I think the reduction in interest rates is a must now.

“Particularly talking about textile industry perspective, I don't think he has done any harm to the industry prospects. He has reduced the duty on branded garments from effective 4.5% to effective 3.6%. So that's a welcome step. Shuttle-less looms have been exempted from customs duty, which is also an important step.

“However, he could have done something on the fuel subsidy front as that is a major issue that the country is facing right now. He has done a commendable job by increasing the import duty on gold further because gold is currently the second largest item in our import bill. So, if gold imports are discouraged, it will help in correcting the current account deficit and further strengthening the rupee to dollar conversion rate also”.

Speaking about his unfulfilled expectations from the budget, he informed, “The government should do something to boost exports. Earlier we used to have an income tax exemption over exports. Besides, FDI in multi-brand retail could have been a major boost for the overall industry but that will take its own time now”.

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