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Bankers welcome Budget, hail taxation proposal

india Updated: Jul 06, 2009 15:20 IST

PTI
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Leading bankers on Monday welcomed the Budget for 2009-10 and have said that with a lot of tax rates left unchanged, there will be more money in the hands of the common man.

Finance Minister Pranab Mukherjee presented the Budget today and left many tax rates untouched even as he did away with the Fringe Benefit Tax, among others.

"I think I am overall very happy with the Budget ...," HDFC Chairman Deepak Parekh told private news channel CNBC TV18.

Stating that he does not see any reason for being negative on the Budget, Parekh noted that the Finance Minister mentioned the role of the private sector and private finance in the speech.

"You must understand that he mentioned the role of the private sector and private finance ... Disinvestment will happen. The government needs more money ... I don't see any reason for (being) negative at all," he noted.

ICICI Bank Chairman K V Kamath said the Finance Minister has held taxe rates and made it into a neutral Budget in terms of taxes.

"The important part (in the Budget) is holding tax ... (This would be) pushing money into (people's) hands and it is certainly good for the economy," he said.

Kotak Mahindra Bank Vice-Chairman and Managing Director Uday Kotak said there are significant steps in the Budget to stimulate domestic demand in the near term.

"Lots of tax rates are unchanged, which therefore means more money in the hands of people ... (There are) significant steps (in the Budget) that will stimulate domestic demand...," he said.

Kamath pointed out that the Budget has increased the outlay for the rural employment guarantee scheme.

"This is a Budget that will take two-three days for a larger market, not just the capital market, to understand and then probably react to ...," Kamath said.

On the projected fiscal deficit of 6.8 per cent for 2009-10, Kamath said that everyone had expected that that would be the number.

"But I would think that probably everyone, not just the markets, was expecting how to bridge that (fiscal deficit)," he said, adding that the Budget did not spell out how to tackle the fiscal deficit.

Kotak noted that in these times of global recession, the Budget could help in protecting domestic demand and it would be a good thing in the medium term.