GENERAL

Unique
The budget is unique in its own way. It will take care of all aspects of the daily life and make efforts to improve the standard of living. The five priorities announced in the budget speech will address the needs, aspirations and expectations of the common man and the proposals are aimed at fulfilling the assurances given by the finance minister.
Atal Bihari Vajpayee
Indian Prime Minister, New Delhi

Consumers benefit
The budget proposals are great and growth-oriented. They have outlined new strategies for growth with a reduction in the excise duty. The provisions in the budget will increase the purchasing power of consumers, bringing them back to the market, which is quite good for the Indian economy and the industry in particular.
Tarun Das
Director general, Confederation of Indian Industry, New Delhi

A fine balance
In a long-pleasing speech, Jaswant Singh has managed to keep most factions happy by way of reducing direct as well as indirect taxes. Series of feel-good factors include increasing standard deduction, removal/reduction in surcharge, removal of dividend tax incidence in the hands of investors, enhancing limits under Section 80L, abolition of long term capital gains, wide scale reduction in excise duty as well as custom duty, and many more.
Nirmal Gangwal
Managing director, Brescon Corporate Advisors, Mumbai

A welcome surprise
The budget proposals were a welcome surprise. An election year and strong populist pressures notwithstanding, it has maintained the commitment to reforms and attempts to stay on course to bring fundamental changes. Its focus on the socially important sectors of healthcare and education is refreshing and long overdue. From a taxpayer's perspective simplification of procedures is welcome.
Ameet Parikh
Country director, Ernst & Young India

Lacks growth punch
The budget lacks the much-needed emphasis and thrust on growth, as the power sector reforms are totally neglected because most of the states are power deficit and there cannot be any growth without power. The finance minister should have laid emphasis on growth and savings, but has missed the bus. I feel de-reservation of further 75 items from the small-scale sector list as well as not increasing the excise exemption limit of the sector from 1 crore to 1.5 crores as the input cost has gone up, shall adversely affect the growth, development, exports and employment generation of this sector.
Vijay G Kalantri
President, All India Association of Industries, Mumbai

INFORMATION TECHNOLOGY

A step in the right direction
I am extremely pleased with the tone and contents of this year’s budget proposals, since they very clearly aim to put India on the global map in terms of competitiveness, which is imperative given the WTO requirements. For the IT sector, the continuation of benefits under Section 10A & B as well as the proposal for continuation of the tax benefits even in the event of a change in the shareholding pattern are very welcome. The steps for the automation of the ministry of finance are also a step in the right direction. The finance minister should be complemented for the overall proposals in the areas of biotechnology, R&D as well as the reduction in tariffs in the IT and telecom sectors.
S Ramadorai
CEO, Tata Consultancy Services, Mumbai

Sticking to commitment
Restoring tax benefits was the main concern for the industry. We are delighted that the government is sticking to its commitment. The world market is going through tough conditions but we are doing well. It is good that these tax breaks are being restored, otherwise the growth momentum of our industry would have been lost.
Kiran Karnik
President, Nasscom, New Delhi

Will encourage investment
Overall, a budget focused on the fundamentals, capable of boosting growth despite a sluggish global economy. The focus on infrastructure development, measures on corporate and individual tax, reduction in excise and customs duties are all welcome steps that will result in employment generation, consumer confidence and spending and growth.
R Ramaraj
Managing director and CEO, Sify, Chennai

Conducive
The budget is growth-oriented. The focus on infrastructure spend, modernisation of ports, construction of new airports, simplification of procedures for exports and imports and reduction in transaction costs, introduction of VAT by 1 April 2003… all send very positive signals of a positive and conducive business climate.
Vinnie Mehta
Director, MAIT, New Delhi

Fulfilling aspirations
The finance minister has fulfilled most of the aspirations of the IT industry. Providing the tax exemptions also upon change in ownership or shareholding in case of amalgamation or de-merger will expand the market. Investments in two international airports and roads will improve the infrastructure for better connectivity. Tax rebates for dividends and capital gains will help reduce the cost of equity for companies in the knowledge sector.
M D Pai
Chief financial officer, Infosys Technologies, Bangalore

A reforms-based budget
The budget is extremely progressive and is likely to boost the economic growth in the coming years. Several exemptions on customs and excise duties are very encouraging to achieve the planned 8-per cent growth for the country, thereby facilitating overall growth and investment. It is more of a reforms-based budget.
B B Somani
Managing director, Abee Info-Consumables, Pune

IT benefits
Jaswant Singh has presented a forward-looking budget and we congratulate him on that. It is heartening to know that the finance minister continues to recognise information technology as a showcase industry in India. Specifically, we appreciate the decision of the government to extend the tax incentive under Section 10A and 10B of the Income Tax Act till 2010. This will provide continued impetus to the Indian IT industry.
Deepak Ghaisas
CEO (Indian operations) and CFO, i-flex Solutions, Chennai

Further impetus
The restoration of tax holiday provisions under Sections 10 A, B is a positive move for the IT industry and reaffirms the government's commitment towards growing this sector. Tax neutrality for reorganisation is another welcome move that will allow industry to leverage synergies and reap the benefits of consolidation, giving it a further impetus.
Arun Duggal
CFO, HCL Technologies, New Delhi

As expected
The budget is in tune with the expectations of the IT industry. We welcome the retention of tax exemptions for the IT sector. The budget has clarified applicability of Sections 10A and 10B in terms of changes in ownership — this will facilitate mergers and acquisitions. Another positive step taken is the raise in overseas investment limits from the current level of 50 per cent to 100 per cent.
B Ramaswamy
President and managing director, Sonata Software, Chennai

Sigh of relief
A good thing about the budget is that the finance minister has put to rest a longstanding controversy on excise on preloaded software. Though this was not being charged by any major vendor, earlier pending resolution by the tribunal, it takes away an irritation. On the whole, we are optimistic about the economy in the coming year as well as the prospects for the hardware industry.
W S Mukund
Managing director, Acer India, Mumbai

A greater boost
The budget has a strong focus on growth with a large outlay on infrastructure, which is a welcome step. The recommendations with regard to full exemption of tax on export profits and exemption of demergers and amalgamations forming provisions of Sections 10A/10B should help the software industry. The IT manufacturing sector is, however, disappointed that reduction in excise duty did not materialise. This would have helped counter the threat from the flourishing grey market.
K R Naik
Chairman and managing director, D-Link (India)

MUTUAL FUNDS AND INVESTMENT FIRMS

A beneficial one
This is indeed a commendable budget. On the threshold of an election year, the finance minister has courageously cut the small savings rate, and announced a number of measures, which will benefit industries as wide ranging as telecom and IT on the one hand, and textiles on the other. The measures to put our infrastructure on the fast track are also going to be an immense boost to old economy industries like steel and cement.
Krishnamurthy Vijayan
CEO, JM Mutual Fund

Pragmatic
This seems to be a pragmatic budget. The cuts in fertiliser subsidies and in small savings rate need to be lauded because they are relatively harsh. Mutual funds should benefit because the lower taxes for equity fund investments will attract investors.
Ved Prakash Chaturvedi
CEO, Tata TD Waterhouse Asset Management Company, Mumbai

A positive exercise
The budget is a forward-looking and positive exercise. As far as the equity markets are concerned, the exemption of dividends and long-term capital gains from the income tax in the hands of the investor would provide a sorely needed fillip. Initiatives of the rationalisation of custom and excise duties, as well as the introduction of VAT, will spur economic activity.
Milind Barve
Managing director, HDFC Mutual Fund, Mumbai

Crucial move
The budget has delivered on most expectations. The sceptic might argue that the deficit has not been forced down or that expenditure containment is not in evidence. But the current global economic environment is such that some element of pump priming by the government is crucial if growth is to be sustained.
S Naganath
Chief investment officer, DSP Merrill Lynch MF, Mumbai

Market disappointment
The market is disappointed that FDI relaxation has come only for private banks. The restoration of tax sops for software companies is a welcome relief. On the whole, it is a good Budget but remains to be seen how will the minister raise revenue.
Arun Kejriwal
Director, Kris Research Company, Mumbai

A common man’s budget
This budget has fulfilled most of the wish lists of the common man and the equity investor. Equity players are bound to cheer the abolition of long-term capital gains. But the abolition of the dividend tax is with a caveat, as the issuer will be deducting 12.5 before distribution. The salaried person will surely be pleased with the increase in standard deduction. Even the people in the high-income bracket can now get standard deduction up to Rs 20,000.
Chandan Desai
Marketing head, Taib Securities India, New Delhi

Ambiguous
There is a possibility of a rate cut, but I am not sure it will come in the April monetary policy. There is pressure on central banks in advanced economies to reduce rates, which leaves scope for a cut locally. There is also a justification for a cut if oil prices remain where they are as the recovery we have seen so far could be jeopardised and the economy could quickly move into a soft spot.
Dhananjay Sinha
Analyst, JM Morgan Stanley, Mumbai

Helpful
The budget turned out to be ahead of expectations in its focus on promoting growth through focused expenditure on infrastructure. The demand created as a result will help many industries, while making the efficiency of the economy move up significantly. The question is on the revenue side where the finance minister has promised the rationalisation of the tax process and also its simplification that may well broaden the net.
Alok Vajpeyi
President, DSP Merrill Lynch Mutual Funds, Mumbai

BANKING, FINANCE AND INSURANCE

Disappointed
As a private life insurance player, we're disappointed in not been given the opportunity to participate in the mass pension such as the one to be launched by LIC for individuals aged 55 and above. Private players have done much to expand the retirement solutions market, reflected in their combined market share of over 30 per cent, and ICICI Prudential, for one would have been happy to have an opportunity to participate in this mass pensions segment.
Shikha Sharma
CEO & MD, ICICI Prudential Life Insurance, Mumbai

Positive
There are some positives in the budget from the banking industry's perspective. The step to increase FDI limits in private and foreign banks from 49 per cent to 74 per cent will be welcomed, as also the removal of the limit of 10 per cent on voting rights. In addition, providing the necessary legislative support to the Credit Information Bureau will be a step towards promoting efficiency in the credit market.
Vishwavir Ahuja
MD and Country Head, Bank of America, Mumbai

Good
It is a good budget being growth-oriented. I would give this budget a score of 7 on 10. But the speech by the finance minister was singularly silent on labour reforms. From the life insurance sector perspective, we were expecting some specific measures for the growth of the industry, including increase in the benefits under Section 88 and Section 80 CCC of the Income Tax Act.
Nani Javeri
CEO, Birla Sun Life Insurance, Mumbai

Will spur investor confidence
The budget is positive — I can see the emphasis on investment and growth. The budget will infuse investor confidence. The abolition of the tax on dividend is a positive signal. For an average consumer it is good news, as prices would come down. The rate of interest should also come down as they have reduced the rate on small savings by 1 per cent. The only worrying factor is the fiscal deficit, which is relatively high at 5.6 per cent.
M Y Khan
CMD, Jammu & Kashmir Bank, New Delhi

Will spur growth
It is a terrific budget for the middle class consumer, with across-the-board reduction in prices arising from indirect tax cuts; in addition to which the finance minister has attempted to put a few more rupees into the hands of the middle class by rationalising direct taxes. Besides, by eliminating long-term capital gains and dividend tax completely, the budget is likely to elevate the mood of the stock markets. The target is to jump-start consumer demand and, therefore, an economic revival accompanied with growth in stock markets and capital formation.
Ashutosh Bishnoi
Marketing head, Om Kotak Mahindra Life Insurance Company, Mumbai

Consumer to bear the brunt
The impact of the 3-per cent increase in the service tax (from 5 per cent to 8 per cent) will be felt by the consumer. Secondly, the healthcare insurance scheme announced by the finance minister is a social security measure and will be administered by the government-owned companies.
Arun Agarwal
CEO, Cholamandalam General Insurance Company, Chennai

Provides a feel-good factor
The cut in rates on savings schemes by 100 basis points is a surprise for the market that had expected a 50 basis point cut and reaffirms the downward bias of interest rates in the economy. This is very positive for the bond market. The budget seems to provide a feel-good factor as it has created an environment for attracting more foreign direct investments.
Neeraj Gambhir
Head, fixed income and derivatives, ICICI Bank, Mumbai

Moves look positive
Clearly there is a thrust towards infrastructure, a welcome reduction in the small savings rate by 100 basis points and a major restructuring of the import tax regime — all these moves look positive so far, but it is a little early to make an overall comment.
Sanjeev Sanyal
Economist, Deutsche Bank, Singapore

A growth-oriented step
It looks like a growth-oriented budget with several extremely encouraging measures. The most encouraging of these is the introduction from 1 April 2003 of value-added tax (VAT), a crucial fiscal reform measure, which has been postponed several times in the past. The tax will significantly improve the fiscal position of the states over the medium term. Also, the proposal to buy back high-cost state government debt will help the states and the banks. The easing of foreign direct investment caps on private banks is also a growth-oriented step.
P K Basu
Regional economist, CSFB, Singapore

A giant step
Basically, the focus on the budget is two-pronged. One is improving India’s competitiveness vis-à-vis China and second is carrying forward the structural reform programme. The introduction of VAT is a giant step although I doubt if it will lead to lower public debt in the short term. But it is a positive step in the long term.
Pieter van der Schaft
Regional credit strategist, Barclays Capital, Hong Kong

An opportunity
I welcome the move but I need to look at the details of the plan to raise foreign direct investment cap in Indian private banks to 74 per cent from 49 per cent. It is an opportunity for ING to raise its stake to a majority. However, having done the transactions I know the complexity of doing it.
Bart Hellemans
Managing director, ING Vysya Bank, Bangalore

Clear direction
The finance minister has clearly spelt out his thrust areas and given a clear direction in the budget. The 1-per cent drop in small savings and the proposal to buy back illiquid government securities are creative ways of balancing between his need for reduction of the interest cost and the market need for liquidity and recapitalisation of banks for provisioning.
Uday Kotak
Vice-chairman and MD, Kotak Mahindra Finance, Mumbai

Best budget
In the given situation, this is the best budget. The health insurance scheme for the masses will work out smoothly when implemented properly and the premium amount (Rs 365 per annum per person) cannot be said as uneconomical.

V Jagannathan
CMD, United India Insurance Company, Chennai


AUTOMOBILES

Nothing to cheer about
Overall the budget has been populist and shying away from bold steps — certainly not a path-breaking budget. It appears that the government is planning to save a substantial amount by reduction in its interest burden. These savings are being given away in the form of numerous concessions under a number of schemes. It would have been better to do away with exemptions and reduce the income tax rate to 10 per cent. The two-wheeler industry, one of the largest and most promising sectors in India, has been given nothing to cheer about. In fact, it has been burdened with an unjustifiable 1 per cent national calamity duty.
Sulajja Firodia Motwani
Joint managing director, Kinetic Engineering, Pune

Whither agriculture?
The rationalisation of excise duty on the tyres and cars and attempt to promote body building by truck companies themselves are welcome moves for the automobile industry. Agriculture has not been given much importance and thrust in changing the crop pattern.
Venu Srinivasan
CMD, TVS Motor Company, Chennai

In the right direction
The current budget announcement continues the focus on developing the essentials of the economy such as infrastructure investment. Additionally, this direction is well balanced with the measures been taken towards social issues such as health. The expected reduction in the custom duty peak rates by 5 per cent, the announcement to implement VAT by April 2003 are both in the right direction.
Ulf Nordqvist
Managing director, Volvo India, Chennai


INDUSTRIES (AIR-CONDITIONERS)

A good summer ahead
It is a growth-oriented budget. I am specifically happy about the abolition of dividend tax. The Finance Bill envisages huge investments in infrastructure projects such as airports and seaports. Several concessions have been announced for tourism, healthcare industry as well as textiles. These proposals are expected to drive overall economic growth. Excise duty on air-conditioners has come down from 32 per cent to 24 per cent. Though the abatement has gone up by 5 per cent, the prices of air-conditioners will drop, and we will witness good market growth this summer.
Ashok M Advani
Chairman and CEO, Blue Star, New Delhi

Boosting
The overall reaction to the budget is very positive. The finance minister has continued with duty reductions. The mega power status for all power projects will provide a boost not only to power generation but also to capital goods manufacturers serving the power industry. The same effect will result from infrastructure investment. Bringing pharma and biotech on par with IT in terms of tax incentives is very positive since India has the human capital to excel in all these sectors.
P Singh
Managing director, Yokogawa Blue Star, New Delhi

INDUSTRIES (ALCOHOL)

Provides wider choice
The government is bound to reduce the customs duty on imported liquor as per the WTO regulations. Therefore, the reduction in the customs duty from the prevailing 182 per cent to 166 per cent was expected. But the rationalisation and reduction of CVD from the existing 50 per cent to 25 per cent for cased products valued over $40 is positive and will provide consumers a wider choice at more attractive prices.
Srikant Illuri
CEO, Allied Domecq Spirits & Wine India, Mumbai

INDUSTRIES (CEMENT)

Disappointing
The budget fails to capture the very words and desire of the finance ministry. In his maiden budget speech Jaswant Singh acknowledged the growth contributed by industry in the current fiscal and talked of consolidating the growth further. However, the budget fails to do the same. The direction and thrust in terms of growth and reforms are missing. Unsavory proposals of the Kelkar committee have been withheld for post election period.
Anil Singhvi
Whole-time director, Gujarat Ambuja Cements

A welcome gesture
The cement industry welcomes many measures announced in the budget which stimulate further demand. The emphasis on building infrastructure and in particular roads is appreciated by the industry. The finance minister has announced minimum 25 per cent of new road projects in concrete. Further, financial support for the rural roads programme has also been announced. The tax incentives for housing are being retained, which we believe will further stimulate housing construction and, consequently, demand for cement.
A K Jain
Executive director, ACC, Mumbai

INDUSTRIES (ELECTRICALS)

More transparent
The finance minister needs to be complimented on demystifying the budget-making process and for making it far more transparent. The strong commitment to social issues such as education, health insurance and housing, reduction in peak customs duty, reduction in central sales tax from 4 per cent to 2 per cent and the categorical commitment to VAT implementation are positive steps. Jaswant Singh has also committed himself to supporting the infrastructure sector in terms of roads, airports and seaports.
R Ramakrishnan
President and COO, Bajaj Electricals, Pune

INDUSTRIES (ELECTRONICS)

Encouraging
The excise and custom duty have been reduced but we had expected that it should have been more aggressive to encourage manufacturing. We are happy that a final decision has been taken on the Bangalore International Airport. This would be of great help to all the business groups in Karnataka.
K U Subbaiah
Managing director, Tyco Electronics Corporation India, Bangalore

Populist
It's a populist budget and is a positive one for the capital market, especially the scrapping of the dividend tax and the long-term capital gain tax on securities. For the salaried class and senior citizens, the budget has incorporated good things.
Rohit Kapur
CEO, Lsasalle Products India, Mumbai

INDUSTRIES (ENTERTAINMENT)

Expected
Overall the budget is a populist one as would be expected in an election year but several welcome initiatives have been taken to give an impetus to sectors identified as 'Panch Priority' in the finance minister's speech.

Prakash Mirpuri
Communications head, E-City Entertainment, Mumbai

INDUSTRIES (FERTILISERS)

So-so
The prices of fertilisers have been increased. Basic urea fertilisers have gone up by Rs 240 per metric tonne. Price of DAP and complex fertilisers have gone up by Rs 200 per metric tonne. This means that the subsidy/ad hoc concession on the same will be reduced. There has also been no major change in the excise duty of industrial chemicals, however details have to be checked.
P B Nanavati
Executive director, Gujarat Narmada Valley Fertilisers Company, Mumbai

INDUSTRIES (HEALTHCARE)

Welcome, welcome
The focus on healthcare provision is a welcome move. The budget propels creation and expansion of healthcare facilities. The increase in the depreciation rates and the income tax exemptions for hospitals expanding to 100 and above beds will increase the number of hospitals and also result in consolidation happening in the industry.
Suneeta Reddy
Finance director, Apollo Hospitals, Chennai

INDUSTRY (PHARMACEUTICALS)

Unattractive
The budget was for pleasing the common man with little tax exemption here and there, with the impending elections in view. But it fails to provide any incentive to companies for increasing productivity. Corporate tax burden has not been reduced as expected, and in fact, with the dividend tax imposed in the hands of the companies, the tax burden will only go up. No announcements have been made to streamline the labour policy to attract more foreign investments.
Vimal Kumar
Finance director, Shasun Chemicals & Drugs, Chennai

Augurs well
The overall emphasis on the healthcare and pharmaceuticals sector augurs well for the Indian pharma industry. Measures like tax holiday for R&D, placing the pharma industry on par with the IT industry for income tax exemption and the withdrawal of export obligation of Rs 20 crore per annum for availing customs duty exemption will benefit the pharma sector well.
K Raghavendra Rao
Managing director, Orchid Chemicals & Pharmaceuticals, Chennai

A big impetus
We endorse the abolition of the customs duty on clinical trial material. This will give a big impetus for doing pharmaceutical-related research in India. We also welcome the abolition of the excise and counter-veiling duty on selective lifesaving drugs. This creates a level-playing field between multinational and Indian companies, thus benefiting the patient. Overall it is a growth-oriented budget, which keeps the needs of the contemporary environment in mind.
Rajiv Gulati
CMD, Eli Lilly & India Company, New Delhi

To provide impetus
The budget is a reform-oriented one. Healthcare has been accorded high priority in this budget. This will provide impetus to R&D initiatives and will have a positive impact on the pharma sector's prospects and valuations. The most positive aspect of this budget is that pharma and biotech have been placed at par with the IT industry. For long the industry has been asking to treat it at par with the IT industry both with respect to IPR and the inputs used for R&D.
Pankaj R Patel
Chairman and Managing Director, Zydus Cadila

INDUSTRIES (TYRES)

To stimulate growth
The budget is progressive, well rounded and will stimulate growth. In particular, tyre being an item of mass consumption, the much-needed reduction in the excise duty on tyres for the replacement market from 32 per cent to 24 per cent is welcome. Equalisation of freight and the introduction of the trust-based tax administration regime will reduce transaction cost and minimise disputes.
Raghupati Singhania
Managing director, JK Tyre, Mumbai