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Industry welcomes fiscal proposals

Industry captains lauded FM for measures to bring in fiscal discipline but had a mixed view on the new tax proposals.

india Updated: Feb 28, 2006 14:08 IST

Captains of Indian industry and investment bankers lauded Finance Minister P Chidambaram for measures to bring in fiscal discipline and cut deficit but had a mixed view on new tax proposals burdening the capital market.

"The industry will be happy as there are no major negatives. It has cut down customs duty and has covered lot of industries as well," CII chief mentor Tarun Das said immediately after presentation of the Budget.

JM Morgan Stanley chairman Nimesh Kampani termed the budget as a good development on fiscal side.

"I think the Minister has done a great job in fiscal deficit, which will be 3.8 per cent of GDP in 2006-07," Kampani said.

Kotak Mahindra Bank Vice Chairman Uday Kotak also welcomed the budget saying it was a positive budget at micro level and was good for long term investors.

However, Ruchir Sharma of Morgan Stanley said it was an "innocuous budget" and there were no policy initiatives to take the market to higher levels.

"The market hoped much more than reforms... Even the Prime Minister had talked about out of the box thinking," he regretted.

CII Vice president R Seshasayee said it was a responsible and mature budget and welcomed the reduction in excuse duty on small cars.

However, General Motors India President Rajeev Chaba said the Finance Minister should have reduced excise duty on all cars as was the demand of the auto industry.

Bharti Televentures chief Sunil Mittal praised Chidambaram for presenting a "very balanced and remarkable budget". The taxes are at level which are growth sustainable, he added.

Bajaj Auto Chairman Rahul Bajaj also welcomed the budget saying that with no new taxes it was a big plus for the industry.

Hero Honda Chairman Sunil Munjal said some of the reforms issues alluded to in the economic survey found no mention in the budget such as labour reforms, which affects the industry.

First Published: Feb 28, 2006 14:08 IST