Swinging between smiles & grimaces

As Finance minister Pranab Mukherjee laid down the Union budget, India Inc’s mood swung from good to bad to ugly.

Corporate honchos at the FICCI started off on a positive note by calling the budget, “balanced and pro growth”. “Agriculture and manufacturing are two big things that the finance minister has spoken about. He says the FDI policy will be liberalised which gives hope to not just retail but many other industries,” said Rajan Bharti Mittal, VC and MD, Bharti Enterprises.

Naina Lal Kidwai, GM and country head of the HSBC Group was upbeat about the mention of ‘green’ in the budget. “It is a balanced and pro growth budget. The aspects which interested me the most are green technology, electric cars, LEDs, and the mention of cleaning Indian rivers. It shows how sustainability and environment are becoming the language of budget,” she said.

However, even before the post budget discussion could end, discontent had started gaining voice. Healthcare representatives expressed their unhappiness at the introduction of service tax in healthcare. The budget proposes a tax on all services provided by hospitals with 25 or more beds that have facility of centralised air-conditioning. Although the tax is on high-end treatment, there has been an abatement of 50 per cent so that the actual burden is kept at 5 per cent of value of service.

“The 5 per cent service tax is the first step to get healthcare segment under the service net. It will grow with time. And whatever increase will happen here will be passed on to the consumer directly,” said Sangita Reddy, executive director - operations, Apollo Group of Hospitals. Shivinder Mohan Singh, managing director of Fortis Healthcare, concurred, “Healthcare coming under the tax ambit will add to the inflation in the country.” Dr Habil Khorakiwala, chairman of Wockhardt added, “To me the budget could have been far bolder than what it is given the challenges before the economy.”

At the CII too, India Inc. had mixed reactions. While automobile honchos including the likes of RC Bhargava, chairman of Maruti Suzuki India and Venu Srinivasan, chairman of TVS Motor seemed relieved about no hike in excise duty on cars and bikes, others such as RS Sharma, former chairman of oil major ONGC, rued no aid to loss making oil companies. “It’s not a positive budget for the oil sector. Issues haven’t been addressed. The crude prices are at an all time high. We were expecting relief, but the budget is mum,” said Sharma. Pawan Goenka, president of automotive at M&M and head of Society of Indian Automobile Manufacturers (Siam), was ecstatic at no levy on diesel vehicles’ purchase. “No diesel vehicle tax is a sigh of relief,” Goenka said. M&M only sells diesel vehicles.

Dissatisfation ruled the post budget discussion at the ASSOCHAM too. “Tourism sector was expecting benefits similar to exporters. Like exports, tourism too needs service tax exemption,” said Subhash Goyal, co-chairman, Tourism and Hospitality Committee, ASSOCHAM and chairman, STIC Travels.