Budget a perfect balancing act - Dabur India Ltd CEO Mr Sunil Duggal
I would term Mr. Pranab Mukherjee's Union Budget 2010-11 as a perfect balancing act that seeks to achieve fiscal consolidation while not losing sight of the growth momentum and the growth engines. It's a fit case of prudent economics by the Finance Minister. He has stuck to the UPA government's "Inclusive Growth" theme by continuing its focus on the Aam Aadmi and doling out more money for rural India, thereby giving the economy that much-needed tailwind to surge ahead.
While there may not be any direct upsides or downsides for the FMCG industry in this Budget, the higher allocation for rural spending, decision to expand the National Rural Employment Guarantee Scheme, credit support to farmers the increase in subvention for timely repayment of crop loan from 1% to 2% would surely go a long way in putting more money in rural pockets and ensuring that rural demand continues to power ahead. The intention to further promote the development of infrastructure, particularly in rural areas including highway development, is also a big positive and will help companies like Dabur improve penetration.
The best part of the budget is surely the raising of income tax slabs and the marginal hike in exemption limit. These measures will result in higher disposable income in the hands of the masses, which would, in turn, fuel demand for consumer products and mitigate the expected impact of rising food Inflation.
While the hike in Minimum Alternate Tax (MAT) would lead to slightly higher tax outgo, the industry is upbeat about the government's move to reinforce its intent on introducing national-level Goods and Services Tax (GST) from April 1, 2011.
While the government's rolling targets for fiscal deficit pegged at 4.8% and 4.1% for 2011-12 and 2012-13 respectively may seem a bit far-fetched or optimistic, I would rate the Budget as overall positive. |
Union Budget