Considering the present internal and external conditions and FM constraints, in our opinion, FM has presented a very balanced and well crafted Budget 2011-12.
While the Budget has not given any positive sops directly to Packaging sector, on the other hand, it also has no negative impact thereon.
There are, amongst others, some of the measures / steps introduced by FM which are very timely and useful.
- Great impetus has been given on the infrastructure development by way of higher resource allocation, increase in FIIs limit & tax incentive on infrastructure Bonds etc. which has been backbone of economic growth.
- Higher resource allocation towards Education and Health sector has been very positive and also towards Defence services which is very essential and important to combat increased terrorist activities and unrest in internal security.
- The lower tax rate of 15% on Dividend from foreign subsidiary of Indian company has removed the disparity with the taxation of Dividend in India. Such measure will also help in improving the foreign inflows of money into India.
- FM has set the direction for introduction of GST, DTC & Cos bill from next year.
- While the investment by foreign investor in SEBI Regd. FIIs may channelize black money from outside into India but the Govt. could have announced some direct measures to handle this issue.
But no major / concrete visible steps appear to have been covered to contain the perennial issue of sticky inflation, crude price rise and immediate addressing of epidemic of corruption, which remain major challenge to the Government. On the whole, FM really deserves appreciations and congratulations for his stupendous act.
The Author is Mr. R K Jain – Group President (Finance), Uflex Ltd.
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