Budget Reactions – Suresh Rao, CFO, Mindteck
Suresh Rao, CFO, Mindteck, shares his post Union Budget 2011 reactions with CXOtoday.com.
“The Budget is along expected lines. The Finance Minister left it to the DTC and GST Act introductions in April 2012 to address the Direct and Indirect tax reform and addressed only the more immediate issues on expansion of Service tax base, increase in basic exemption limit for individual income tax and input tax credit rationalization for exporters. On the whole, the budget leaves one with the feeling that all issues were spoken of but concrete steps to address these were not laid out. The fiscal deficit numbers look optimistic and we are not sure how the Govt will work within the boundaries of this budget without additional means to mobilize additional resources. The Disinvestment program also looks far too optimistic in view of the prevailing stock market and global economic situation.
There are some strong directional statements like the FII participation in Infrastructure Bonds and Mutual Funds, significant increase in Budgetary support for Education, Agriculture and Rural employment , disbursement of subsidies directly for Kerosene and Fertilizers, reviewing FDI norms by Group of Ministers etc, which are noteworthy.
IT Industry’s demand for extension of tax holiday to STPI units on export proceeds appears to have not been met, but we would need to dive deeper into the fine print to see if there are surprises in store. Likewise, the impact of budgetary amendments in Service tax, particularly related to refund rules for IT exporters, needs to be examined more thoroughly before coming to conclusions.”
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