Union Finance Minister Pranab Mukherjee marginally raised the Income-Tax exemption limit, abolished FBT and Commodity Tax and said his government is here to work for the benefit of the aam aadmi.
The Opposition blasted the Budget, most captains of the Indian industry cheered and the Sensex tanked a massive 870 points at close.
What exactly does the Budget has for the common man? Are you going to benefit from the Budget proposals? Or does it hardly make any effect on your daily life.
In an hour-long post-Budget chat on rediff.com, R Seshasayee offered some valuable tips.
Seshasayee is a chartered accountant who started his career with Hindustan Lever Limited in 1971.
He joined Ashok Leyland in 1976. Appointed as executive director in 1983, he has been the managing director since April 1, 1998.
On the National Council of Confederation of Indian Industry for over 15 years, he has been chairman of several national committees of CII.
R Seshasayee says, Hi
Paras jain asked, How this budget will affect the corporatr persons. secondly middleclass person ia benifited or not
R Seshasayee answers, at 2009-07-07 14:32:36I believe that the job opportunities will increase as a result of higher level of govt expenditure stimulating demand. There are no major changes to personal taxation and hence money on hand. What is important is the continued growth of the business that you are working for and the growth opportunities that will come your way as a result of that.
sundaram asked, The turnaround in economy is expected in 3rd Quarter. Normally the commercial vehicle sector takes about 2 to 3 months to rebound. Therefore, is it fair to assume that the growth in commercial vehicle sector will take place only in the next fiscal year ?
R Seshasayee answers, The commercial vehicle industry has already begun to show an uptick. You are right that the true rebound will take place only in the next fiscal, but we are on the path of recovery.
Sagar asked, Sir, where do you see the automotive sector going on from here? How much will Ashok Leyland invest for its expansion plans? Can you throw some light in this regards..
R Seshasayee answers, I continue to be very optimistic about the growth prospects of Indian auto industry. Firstly, despite the setback in recent times, Indian economy has the potential to grow at a robust level. Motorisation of the economy will follow growth of middle class. Secondly, Indian auto industry is getting to be globally competitive, Hence, growth is to be expected. Ashok Leyland has already invested in a new world class plant in Uttarakhand to increase our capacity from 100,000 vehicles per year to 150,000 vehicles per year. We would also be implementing our LCV project in joint venture with Nissan. Whilst we have to calibrate our capacity creation in line with the market, overall I am bullish for the medium /long term.
sundaram asked, It is indicated that the higher fiscal deficit (6.8% of GDP) may have risk of foreign capital flows - it was generally felt that the deduction in FDIs and withdrawal of foreign investment in India led to the recession in India, so could this deficit trigger second round of recession
R Seshasayee answers, This is a complex but very interesting question. Fiscal deficits usually result in inflation and higher interest rates. In the short term, this will attract foreign savings because of higher interest earnings. On the other hand, because of inflation, capital gets eroded and thus foreign capital will tend to be pulled out. However, in the current context of uncertain economic situation in the world and given high levels of fiscal deficit in many countries, capital flow tends to flow to safer and more secure destinations. I believe India has a tremendous opportunity to attract investment now, because Indian economy is relatively more stable, Indian growth story is more appealing than many other markets.
dean asked, in the exim trade, how is this budget helpful? also for the aam admi, how is this budget going to help him in increasing his demand?
R Seshasayee answers, This budget focusses on govt investment and govt expenditure. It is my view that this will be followed quickly by private investments. At that level of investment, we are bound to import more. On the exports side, Indian products are likely to get more competitive because of cheaper commodity prices across the world. The budget has addressed some incentives with respect to exports, but they are limited. In all, import export will grow commensurate with growth in economy.
R Seshasayee says, Thank you - It was a pleasure chatting with you.