The industry seems to be divided on repercussions of Budget 2008 on the health of Indian economy. Finance minister P Chidambaram?s Budget is being perceived as people-oriented, stressing adequately on inclusive and sustainable growth but falling short on the reform agenda, according to the industry leaders polled by Confederation of Indian Industry (CII). However, the industry captains surveyed by PricewaterhouseCoopers(PWC) view the Budget in a far less satisfactory manner.
A survey by CII, that tested the pulse of CEOs on the Budget document found 94% of them terming the Budget people-oriented. Majority of them (76%) also believe that the document focused on inclusive and sustainable growth. While most of CEOs (72%) polled agreed that the Budget was growth-oriented, more than half (58 %) considered the Budget to be lacking in reform orientation.
Similar sentiments were echoed by 89% of industry leaders polled by PWC who found the document falling short on the reform agenda. The CII survey showed many of the CEOs (63%) being of the opinion that the Budget mainly catered to the rural economy. But half of the respondents also felt that the Budget announcement incorporated measures that can enhance the competitiveness of Indian industry. On the contrary majority (62 %) of those polled by PWC believed that Budget 2008 doesn?t contain significant measures to make India Inc globally competitive.
Casting a favourable opinion on the tax burden, about 87% of the CEOs polled thought that the Budget proposals would not increase the overall tax burden on the industry and economy. About 80% of the CEOs surveyed also expressed that the Budget announcements would help India?s transition from a labour-arbitrage to a knowledge-arbitrage economy.
Of these, around 28% of the CEOs opined that the Budget announcements on R&D, developing skills, expanding the network of knowledge institutions and networks would definitely help
India reap the benefits of knowledge-arbitrage to drive the growth momentum in the economy.
According to 55% of PWC survey respondents Budget 2008 has not taken meaningful steps to promote growth while keeping inflation in check. Almost all of those polled (95%) by PWC believed that the Budget has failed to address infrastructure problems. The increase in short term capital gains tax was found unjustified by most (76%).
Of the total CEOs polled by CII, only 21% felt that the Budget 2008-09 did not meet their expectations. However, only half of the industry captains surveyed by PWC believed that the Budget would have a positive impact on the economy.