Budget Reactions – M.P. Vijay Kumar, Sify Technologies

by CXOtoday Staff    Feb 28, 2011

M.P. Vijay Kumar  CFO SifyM.P. Vijay Kumar - CFO, Sify Technologies shares his post Union Budget 2011-2012 reactions with CXOtoday.com

The outlook on controlling fiscal deficit is quite positive. The references to ‘need to strengthen agriculture sector, fiscal incentives for investment in cold chain, interest subsidy to farmers’ and recommendations of APMC are quite encouraging, though I did expect more to aid a second Green revolution which is key to ensuring food supply levels and avoid the kind of inflation we are currently witnessing.

The next phase of growth has to happen only through digital infrastructure; some fiscal incentives should have come to this sector to enable penetration of broad band services to Tier2, 3 and 4 towns and also IT infrastructure.

I am completely disappointed on MAT. It is threatening to get closer to marginal tax rate and current effective rate of many companies. MAT has to be minimum in words and spirit.

The MAT rate should have been brought down to at least 10% to encourage investment of accrual in capital formation/employment creation which is key in long run.

Given current inflation levels, the increase of personal tax exemption limit will not even be noticed by many. At least investment limits for investment in long term infrastructure bonds could have been increased which would have enabled some tax savings for individuals and availability of long term funds to Government to fund infrastructure expansion.

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