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While the Union finance minister is busy giving finishing touches to the Budget, corporates are thinking ahead. They are gearing up to respond to the Budget proposals. After the Budget is presented in Parliament and the Finance Bill is made public, the company finance departments comprising chartered accountants and tax experts will immediately swing into action and calculate implications of the provisions of direct and indirect taxes in their respective sectors. The annual exercise has a lot of relevance for the industry as excise and customs duties have a significant impact on price levels of products and services.

Says Kris Gopalakrishnan, CEO and managing director, Infosys Technologies Ltd, “Our finance department assesses the impact of the budget on our business and we take an appropriate action based on this assessment.” He adds that the budget is important since it may propose policy changes that impact their businesses as well as profits and losses.

This year’s budget has a special relevance for the IT sector because the looming US recession and the rupee appreciation are taking a toll on its profit margins. A firming rupee has led to a deceleration in the growth of the bottomline of IT companies and the net profit growth rate has plummeted to 12-30% in the current fiscal from 40% in Q3 of FY07.

While Gopalakrishan will log on to the Internet to read the budget fine print, Ramaswami Subramanian, founder and managing director, Subhiksha Trading Services, will watch the live telecast and interact with his senior managers to analyse the impact of the budget on the retail industry and on his company. Subhiksha is one of the largest retail chains in the country. He adds, “Though the budget is more important at a macro and mood setter level rather than for business plans and strategies as the government has substantially liberalised the marketplace, our senior management team will keep a close watch on the impact of various moves and proposals.”