New Delhi: India Inc on Monday gave a thumbs up to the measures announced in the Budget to boost rural and infrastructure sectors, saying they will have a multiplier effect on the economy even as it expressed dissatisfaction on the corporate taxation front.
The industry was expecting a phased reduction in corporate tax rate to 25 per cent to begin in 2016-17 across all categories.
Terming the Budget as pragmatic and growth-oriented, Hinduja Group of Companies (India) Chairman Ashok P Hinduja said: "The government's commitment for retaining the fiscal deficit at 3.5 per cent will have sobering effect on the interest rate in general and on the yields of government and corporate bonds in particular. This will place our economy in the double digit growth trajectory."
He also said the amnesty window announced for unaccounted money is a good initiative. "However, tax on dividend above Rs 10 lakh is a big disincentive for promoters/large investors," Hinduja added.
Adani Group Chairman Gautam Adani termed it a prudent budget with focus on growth and adherence to fiscal discipline.
"The focus on improved infrastructure through network of roads, rail, ports and airports will provide impetus for enhanced growth and in turn generate employment.
"Targeted focus on affordable housing with tax exemptions for developers and individuals will auger well for the sector. Incentive to small tax payers will result into more savings which would provide funds for growth," Adani said.
Expressing similar views, Walmart India President and CEO Krish Iyer said: "The Union Budget continues to rightly focus on rural and infrastructure sector. The planned investment in these two critical sectors will not only create jobs but also give impetus to demand generation and economic growth."
Veteran industrialist and Bajaj Auto Chairman Rahul Bajaj, also gave Jaitley a good rating saying "Overall, I would say (the Budget is) pretty good."
However, Ficci President Harshvardhan Neotia said, "Corporate tax rate reduction was something that we were looking at ... a clearer roadmap on how it is going forward... Going forward, we expect some clarity on how the exemptions will be eased out."
CII President Sumit Mazumder said: "There was a lot of debate when Finance Minister Arun Jaitley talked about reducing it (corporate tax) to 25 per cent. I don't believe anything has been done on that but he has got a four-year window for it."
CII President Designate Naushad Forbes lamented that the Finance Minister has not reduced corporate tax at all this year except for very small firms.
Besides, Biocon CMD Kiran Mazumdar Shaw said: "I see no boost to investment in manufacturing. Disappointed to note there is no increased allocation to Science & Technology".
Expressing disappointment, Mahindra Group Chairman Anand Mahindra tweeted: "In summary, despite our disappointment on the tax on cars, I see no reason for mayhem in the market."
In his Budget 2016-17 proposals, Jaitley stated that with regards to small units having turnover of Rs 5 crore, the corporate tax rate has been reduced from 30 per cent to 29 per cent.
This is part of the exercise to bring down corporate tax rate in a phased manner from 30 per cent to 25 per cent over period of four years.
To boost domestic manufacturing and job creation, Jaitley allowed new units incorporated on or after March 1, 2016 an option of being taxed at 25 per cent plus surcharge and cess, provided they do not claim profit-linked or investment-linked deductions.
At present, they pay 30 per cent plus surcharge and cess. Assocham President Sunil Kanoria said rationalisation and simplification of tax rates would have benefited the overall ease of doing business, especially keeping in mind that GST implementation seems to have been pushed ahead.
Godrej Group Chairman Adi Godrej said, "The additional personal tax on dividends above the Rs 10 lakh limit may lead to lower investment in the long term stock market, as high rates of taxes have always in the past lead to lower investment and growth."
Vice Chairman and MD Bharti Enterprises Rajan Bharti Mittal termed it a "growth-oriented Budget". Suzlon Group CMD Tulsi Tanti said, "The government continues on its plan to providing 100 per cent electrification by May 1, 2018. This poses incredible opportunity for the renewable sector and to boost rural economy."
Snapdeal Co-founder Rohit Bansal said, "The relaxation of taxation on income from patents and direction of funds towards building world-class higher education institutions will drive innovation in the country."
"The e-commerce industry will also greatly benefit from the increased investments in infrastructure and digital literacy in rural areas," he added.
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