NEW DELHI: India Inc today welcomed the focus on reviving economic growth to 9% as also the indications for bolder tax reforms, but expressed regret that Minimum Alternate Tax (MAT) was raised and Securities Transaction Tax (STT) was let to continue.

“Finance Minister Pranab Mukherjee’s efforts to revive the economy back to 9% (growth) is in the right direction,” ICICI Bank MD and CEO Chanda Kochhar said.

“I am happy on behalf of the whole industry that Fringe Benefit Tax (FBT) has been abolished, but I am a little bit unhappy about MAT,” top industrialist Rahul Bajaj said.

The MAT rate was hiked to 15% from 10%.

Kochhar felt that STT, too, should have caught the government’s attention.

“Health care sector has been ignored. We had been expecting a boost for the health care infrastructure, but nothing has been said. Budget was mute. We are disappointed,” Shivinder Mohan Singh of Fortis said.

The industry also welcomed restoration of the seven-year tax break on natural gas production, saying it will help attract foreign bidders for NELP-VIII.

“This was always there. It is not a new benefit. We are very happy about the clarification as it ends the ambiguity," said P M S Prasad, President and CEO (Oil & Gas), RIL.

Here are some other reactions:

Sajjan Jindal, President, Assocham

I think that this is a good budget. I completely agree that rural India and the agriculture sector, on which 60% of the country depends, is the most important part of India. Corporate India needs to tap this market. In the last few months, when the global economy has been going through twist and turns, this is the reason why India has sustained. That (rural India) is what this government is going to emphasise and I am glad for that.  

Harsh Goenka, Chairman, RPG Enterprises

The Finance Minister has played a well-crafted Test match innings, rather than a 20-20 knock. His speech has sought to lay down the broad framework of the government’s agenda for growth and development. Overall, the Budget is an expenditure-driven one, given the need to provide a push to economic growth and consumption. The growth target of 9% is laudable given the global economic turmoil. I am sure that after setting the stage with this innings, we will see some Big Bang innings from the Finance Minister in the coming years.

Chanda Kochar, MD and CEO, ICICI Bank

I think, in any case, the markets were expecting too much and the lack of clarity on government borrowings and disinvestments disappointed the market.

Murtaza Khorakhwala, MD, Wockhardt

The stock market is just the reflection of the capital markets and corporate India. It does not truly reflect the rural economy and the social sector, which is the large part of the Indian economy.

Ajit Gulabchand, Chairman, HCC

Over a period of next 10 days, you will see the market understand the budget better and reflecting the investment climate better.

Rakesh Sarin, MD, Wartsila India

The market is not the only parameter. We have over 20% GDP coming from the rural segment. This is not truly reflected in the market. We also need to recognise that the India story is growing by 9%. Even when the world economy is looking bad, having a growth rate of 6.7%, is a yardstick in itself. So the devil is the in the detail and deployment.

Karl Slym, President & MD, GM India

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. 

As far as the automotive industry is concerned, the budget did not fully meet the expectations as the sector continues to remain sluggish. Having said this, government’s intention to introduce GST with effect from 1st April 2010 and reduce the CST by 1% are welcome decisions. Our hope is that the market will respond favorably.    

Sumit Banerjee, MD, ACC

Overall, the Finance Minister has balanced the need for a budget that promotes inclusive growth, support to socially-oriented programmes and rural development with a focus on infrastructure development. It is heartening to hear that government will lead the economy back to a growth of 9%, revive domestic industry and spur agriculture to grow at 4%.

But we are disappointed that cement fails to get any respite from the high rate of taxes and duties. In fact, the recent petroleum price hike has further increased the burden on cement. Similarly, we were hoping that retail housing would get a boost by way of an increase in personal income-tax exemption on housing loan interest, but that has not happened.

Vijay Tarani, CEO, NIIT

Certainly it takes closer to 10% (growth), at least 7-9% has been stated. Directionally, it is inline with what we are expecting. But I think things could have been more. On the other hand, we do have a 6.8% fiscal deficit. At the end of the day, these are issues that we have to look into.

Anjan Bose, Philips Healthcare

There is nothing major for healthcare in this budget. The earlier budget talked about new investments like the expansion of All India medical institutes. We didn’t hear much about that. We did hear some couple of exemptions on medical equipments, but those are not pointing towards any big growth.

We should not forget the fact that on FBT we had a lot of noise in the past also. So that has been removed and we should be thankful. We will welcome these steps and also there is no change in the corporate tax. It could have gone on the higher side, so it is just like a half-full glass.

Pradeep Bhargava, MD, Cummins Generator Tech

I don’t believe infrastructure could have cost the budget a major trust. For the corporate sector, there is a relief in terms of reduction in service tax at 10%.

Anuj Puri, Jones Lang LaSalle Meghraj

The government has addressed lot on the rural sector and for the weaker section.

TN Manoharan, former president, ICAI

Positive

The big things that impress me is the road map for direct tax code and the implementation for GST by 2010. 

Disappointment

Lack of stimulus for further investment and hike in MAT from 10-15%.   

Rohan Shah, Emerson, Lake & Palmer

Positive

I think the biggest positive is the implementation of the GST and this is the biggest challenge for the government and the industry. No other nation has migrated to GST in six months  and the biggest disappointment is the that we have not been able to seize the opportunity.

Disappointment

Nothing to provide for investment, which should have led to further growth in production. 

S Ramesh, COO, Kotak Investment Bank

Positive

A bit implicit, but I saw a mention of thrust on infrastructure

Negative

The miss was on FDI... something more was needed. As a country  that is going to depend upon infrastructure, the emphasis on the thrust was missing

Naresh Kothari, VP, Edelweiss Cap

Positive

Things like tax. I think that should come through. They were trying to become much more simple. It’s a positive note

Disappointment

I think the question is where are the resources going to come from.

Kaushal Sampat, COO, Dun & Bradstreet

The budget is largely positive, and seems to be ‘aspirational’. The positives in this budget will become most apparent over the longer term. While disinvestment could have found greater articulation, there seems to be a positive movement in that direction. The large number of measures proposed on institutional, procedural and regulatory reforms in such diverse areas as petrol prices, taxation and growth inclusiveness will unlock much of the economic growth potential. 

Naushad Forbes, Chairman, CII (Western Region)

We welcome the reaffirmation of the government’s intention to implement GST by April 2010. We further welcome the abolition of FBT and CTT. However, there is a big lacunae in the impetus provided by the government in boosting industrial investment. There is a missed opportunity of setting out the new government’s overall 5-year reform agenda in areas like education, power sector reforms, etc.

Vishal Bali, CEO, Wockhardt Hospitals

A disappointing budget for the health care sector. There is no significant step in the Budget to reform the healthcare sector and thus create a better healthcare delivery system for India. The only glimmer of hope is the increased outlay for the National Rural Health Mission and the increase in deductions under second 80DD.

Joseph Massey, MD & CEO, MCX Stock Exchange

The Union Budget proposal for 2009-10 has addressed the key issues to lay a strong growth foundation for India, which will go a long way in creating a balanced growth among various sectors, particularly stimulating growth in agricultural, rural development and socio-economic sectors. This, in turn, will go a long way in the overall development, including creating world class organised financial markets for equity, bond, currency and commodity. I would rate the Budget proposal at 8+ on a scale of 10.

Mark T. Robinson, CEO, Citi South Asia

I welcome this pro-growth and inclusive budget as an important milestone in restoring India on the 9% growth path over time. The Indian economy has performed well, especially given the backdrop of global turmoil, as it continues to build on the strength of domestic consumption. As a statement of the fiscal position of the economy, a budget should provide overall direction for the forthcoming year. I expect this budget will stimulate growth, investment and job creation in a variety of core areas pertaining to infrastructure, agriculture, education, exports, IT and small industry.

"While these measures should collectively promote the building of a resilient and competitive economy, particularly welcome is the candid acknowledgement that the unanticipated 6.8% fiscal deficit is a cause for concern and needs to be addressed. We are hopeful that the Finance Minister will, in due course, announce measures aimed at further strengthening spending discipline to ensure that the large spend of over Rs 10 lakh crore fully meets its stated objectives. I am also hopeful that the government will, in the near-term, announce more elaborate policy measures on key issues like divestment, FDI and financial sector reform, which are critical for building a strong, modern economy.