Reacting to Finance Minister P Chidambaram's Budget proposals on Monday, Rahul Bajaj, chairman and managing director, Bajaj Auto, said:
"Overall this is a good Budget. I would rate it 8 out of 10. It takes forward reforms, does not impose additional taxes, in fact give some good cuts, but because of the widening tax base, revenue collection will be higher.
"I am a bit worried about the reduction in depreciation rate from 25 per cent to 15 per cent. At 25 per cent depreciation rate, one could get the full value of capital investment every six-seven years, which is good, because that means we are buying new machinery every few years and expand industry.
"Now, with lower depreciation rate, new investment will slow down and coming on top of the corporate tax reduction, reduce the desire for greater investment.
"Ideally, the finance minister should let companies decide the rate of depreciation, because that will push up growth as companies invest the money saved. Thus, I believe the depreciation rate should have gone up, not down.
"But besides this one aspect, the Budget is good. Nevertheless, in the final analysis, it is not how good or bad the Budget is but how well it is implemented.
"The prime minister (Manmohan Singh) and the finance minister are very conscious about this aspect. But to merely say that implementation will improve at present has no basis. The whole country knows that proper implementation will improve our nation.
"What we need is a strict policy for the bureaucracy to ensure implementation, review their work and progress and weed out the inefficient.
The cut in taxes is good because that will push up purchasing power, which will push up demand, and that will help the economy. As long as demand keeps rising, it benefits the economy.
"This idea about charging tax on Rs 10,000 withdrawn needs to be looked into. At Bajaj, every month we withdraw Rs 20 crore (Rs 200 million) because many of our employees are paid in cash. Does this mean that when we withdraw this amount, we'll be taxed? This needs to be clarified.
