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BUSINESS INDIA ♦ THE MAGAZINE OF THE CORPORATE WORLD

Beauty By Kendrac Uncategorized BUSINESS INDIA ♦ THE MAGAZINE OF THE CORPORATE WORLD
BUSINESS INDIA ♦ THE MAGAZINE OF THE CORPORATE WORLD

Uncategorized

BUSINESS INDIA ♦ THE MAGAZINE OF THE CORPORATE WORLD

Posted By beautybykendrac

♦ DEBOR

Seen as anti-poor or anti-farmer. In the railway Budget too, against the expectation of an increase in the passenger fare, what we got was a sta­tus quo. Just before the Budget, the Opposition had united to give the impression that the Land Acquisi­tion Act as anti-farmer, pushing the government on the back foot. After the heavy drubbing it got in Delhi assembly elections, the ruling party may have thought of not taking any chances, lest its policy may be con­strued as anti-people. This explains why the government did not touch upon as sensitive an issue such as the selling of loss-making public sector units or fixing a disinvestment target in the speech.

The government did give some hint that it planned to decrease cor­porate tax from 30 per cent to 25 per cent – perhaps in the next four years.

Bank Nifty CNX Pharma Finance Index CNX Service CNX Auto Index IT i

MNC 0.72

But there would be no change in the tax rate for the next year. While reducing the tax rate, the govern­ment is also looking at doing away with certain exemptions, to ensure that its tax revenue would not be impacted. But this is^for the future.

Need corrective steps

Also, the fm did not hint whether the reduction of tax from 30 per cent to 25 per cent would be in one go or would it be gradual over the next four years. “The announcement to reduce the corporate tax over the next four years to 25 per cent is a welcome one,” says Adi Godrej, chairman, Godrej group. “However, there has been no incentive for manufactur­ing in this Budget. In fact, because of the surcharge, taxes on the man­ufacturing sector have increased. I do hope the finance minister reduces this surcharge on the manu­facturing sector and takes some corrective steps before the Budget is passed.”

Many experts are calling this Budget positive and believe that this would be the game changer for the country. “The Budget is quite positive, aiming at 8.5 per cent GDP growth,” says Milind Barve, MD, HDFC AMC. “At the same time, the FM has laid down a clear road map for deficits. What is welcome is that the deficit tar­gets are sound, as the minis­ter has made fair assumptions for revenue pro­jections, as also increased capi­tal expenditure, which would

help create jobs and assets.”

But, during the short term, the market needed a big push to lift sen­timent, as India Inc’s earnings for December were not up to the mark. Everyone was looking to the Budget to lift sentiment, but it looks as if it may not happen. Now, what is cru­cial for the market is to watch how the government would handle the land acquisition ordinance bill and insurance bill, which would give enough hint about the government’s ability to push reforms and, in turn, India Inc’s earnings.

The Budget may not lift India Inc’s earnings to any great extent. Today, the market looks expensive, as India Inc’s earnings have not grown as much as many were expecting. In fact, there is a high possibility that India Inc’s earnings may get revised downward. Keeping this in mind, the market may move only in a narrow zone, with a southward bias. While the Budget is good for the long term, what the market needed and was looking for was a short-term push, which has not been forthcoming.

♦ SUNIL DAMANIA [email protected]

 

Written by beautybykendrac

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