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Corporate
Communications
Jamshedpur
28th February 2007
Union Budget 2007-08 - MD,
JUSCO's reactions
While the details of
the proposal are yet to be seen, on the whole, this
budget is directed towards the long term growth of the
Indian economy. More focused is given towards sectors
that are under-performing, without jeopardizing the
growth trajectory of the overall economy. The increased
investment in the sectors such as agriculture,
education, health and infrastructure will contribute to
sustain the overall growth in the long term. The stress
on vocational education and up gradation of ITI through
public-private-partnership would also help to translate
the skills shortage and would in tern boost the industry
in long run. Industry and Services Sectors contribute 26%
and 55% respectively to GDP, hence the increased
focus on infrastructure would help the economy sustain
the present rate of growth and would bring about investments
to boost the industry sector. The focus on agriculture
sector is positive for the economy in the long term. The
actions on reduction in indirect taxes on some products
is specifically to contain the inflation from the fiscal
side, which is more prudent to sustain the growth as the
RBI has taken enough steps on the monetary side.
Bringing in Information Technology Sector under tax
scanner is directed towards increasing the tax base of
the government.
The exemption of
excise duty on water pipelines above 200 mm size and
beyond the water reservoir is a welcome step to boost
the water sector. Provision of subsidies to promote rain
water harvesting structures will bring in much needed
succor to ground water stressed districts.
The budget does not
incentives large investments in the private sector.
Increase in dividend distribution tax and education cess
is certainly negative from the investor point of view.
The urban infrastructure sector, especially the
municipal services sector has been completely ignored by
the Finance Minister and there is no fillip in this
budget to galvanize this sector.
On the whole the
budget is neutral.
(Rajesh Rajan)
Head, Corporate Communications
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