Budget is positive, realistic, say industrialists

The union budget for 2009-10 presented by Finance Minister Pranab Mukherjee Monday is "positive" and "realistic" and both the business community and the common man would benefit from the budgetary proposals, leading industrialists in the country said.

"I am reasonably happy with the budget," said Deepak Parekh, chairman of Housing Development Finance Corp (HDFC).

"The finance minister has stressed on rural housing by allocating more money and by strengthening the National Housing Bank and I think we need to divert our attention to rural housing," Parekh said.

He welcomed Mukherjee's proposal to increase the allocation for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), saying it would give a boost to the urban housing sector.

According to ICICI Bank chairman K.V. Kamath, it is a "pragmatic budget".

"The decision to cut out the surcharge on personal income tax is a welcome step. I think it puts a lot of money into the hands of the lay spender which is certainly good for the economy," said.

He welcomed the budget's focus on the infrastructure sector.

On the capital market's reaction to the budget, Kamat said: "I think this is a budget which will take two-three days for the larger market, not just the capital market, to understand and then probably react to."

Karl Slym, president and managing director of General Motors India, said the budget "is encouraging due to its focus on infrastructure, education, agriculture, irrigation, health care and social security schemes".

"Since it addresses some of the concerns of the industry in general, it should help fuel demand and economic growth going forward," he added.

R. Seshasayee, managing director of Ashok Leyland, said the budgetary proposals were "quite positive".

"Clearly, the intention is to stick both to the larger agenda in terms of the tax reforms and the goods and services tax (GST) for 2010. I think it is a good indication".

Reliance Money managing director Sudip Bandyopadhyay said the introduction of new direct tax code and GST were positive steps.

"However, going forward, issues with respect to opening of foreign investment in certain key sectors, public sector units disinvestment and control of fiscal deficit need to be addressed," he said.

ICICI Security Primary Dealership managing director and chief executive B. Prasanna hailed the proposals for increased spending and the budget's focus on growth.

"But, the bond markets will have to grapple with a higher than expected gross borrowing programme of Rs.450,000 crore. There is an expectation that all the extra borrowing will be front-ended and completed in the remaining three months of the first half."

"This increased borrowing may exert upward pressure on yields on a week-on-week basis. The budget is silent on capital market reforms and on a road map for bigger divestments," Prasanna observed.

Last updated on Jul 6^th, 2009 at 17:47 pm IST--IANS