Date:02/03/2006 URL: http://www.thehindubusinessline.com/2006/03/02/stories/2006030202460800.htm

Back `Neat Budget from long-term standpoint'

Mr Harsh Mariwala, Chairman and Managing Director, Marico Ltd

Mr Harsh Mariwala, Chairman and Managing Director, Marico Ltd

We see the Union Budget 2006-07 as yet another step in the direction set over the past two years. It is heartening to see the broad economic and fiscal framework being retained.

In general, the Budget reflects a greater sense of fiscal responsibility and discipline. It also reveals a quiet confidence to get on with reforms, and build upon the robust platform set up by the encouraging macro-economic data.

We welcome the increased investment in the building blocks of the economy, viz. infrastructure, education and agriculture, as also the thrust on development of rural areas and the North-Eastern Region.

The increased social outlays are in line with the Government's inclusive growth approach.

It is good that the Finance Minister has set April 2010 as the deadline for the goods and service tax. There is a distinct move towards an integrated tax administration that will surely help revenue collection.

This will hopefully address the current systemic unfairness against the organised sector, which has been fiscally diligent.

With the reduced rate of Customs duty, we may be close to the end of the journey towards getting India at par with the rest of the world.

On balance, this is a neat Budget from the macro-economic and long-term standpoints.

While the consumer products and services sector would be happy that there has been no discrimination against branded products and services, it would have been better if the Government had come out clearly for promotion of the branded goods and services sector.

Branding promotes assurances of quality, quantity, and traceability, which are relevant even for revenue collection.

Although the reduction on FBT on certain aspects of advertising is a welcome step, FBT could have been streamlined further so as to remove the anomalies operating against the FMCG sector, such as unfair coverage of sales promotion expenses.

The money markets may not like the increased STT, but would welcome he corporate debt trading facility, as also the enhanced limits for both FII investments in India and Indian mutual fund investments abroad. These may indirectly help the corporate sector.