Balasubramaniam, CEO, Birla Sun Life Asset Management Company

Budget expectations are building up among all of us. However, it is also going to be a toughbudget in terms of achieving a fine balance between growth and fiscal. Many challenges havebeen posed to the Government affecting the overall performance on economic activities due towhich the expectations in the market place is also low.
Some of the obvious changes expected this time could be the reversal of fiscal stimulus thatwas given during the 2009 budget in the form of excise reduction. However, this reversal ofexcise duty needs to also get aligned to the GST proposed tax regime. There are lots of cessattached to corporate tax, we believe, these may be reduced so as to reduce the corporatetax rate as well as to prepare the tax structure to GST proposed regime. Given the high foodinflation, there is a likelihood of food security tax and subsidy to be close to Rs 80,000 crores.
The other social welfare programme of the current Government such as NREGA will continueto be the focus as the programme has been a major success benefitting large pool of publicat the rural market. We believe this expenditure continued to be tagged at about Rs.40,000crores. In the recent past, there has been pressure on Oil prices thus posing threat for Oilsubsidy as well as fertilizer subsidy going up. The amount towards this could be in the range ofRs.26,000 and Rs.80000 crores towards fuel subsidy and fertiliser subsidy.
Non tax revenue for the current year has been one of the best ever in the history of India Incthrough sale of 3G License as well as select PSU disinvestment. We believe this will continueand there is likelihood of generating Rs.40,000 crore from PSU divestment though it is not atthe same order as this year.
However, Budget may attempt to increase non-tax revenue through changing tenderingprocess in sectors like Power, Road and other such infrastructure projects. Given the constraintto the Government in overstating the revenue target in the coming fiscal, we believe overallfiscal deficit would be maintained at around 4.80% translating to a total borrowing estimate ofroughly Rs.4,30,000 crores at gross level.
There has been a need to create a vibrant corporate bond market; however this needs a changein taxation structure for overseas investors. Given the current need to fund infrastructureprojects, we believe Government would favorably alter the TDS on interest payment to attractglobal flows into Indian Bond market. As it is FDI and FOREX flows are the key for the comingyear given the current account deficit. Therefore, in our view, the Budget will bring in focus asto how to get funds to fund the massive need of infrastructure sector either through openingbond market or through introduction of amnesty scheme. As stated in the recent monetarypolicy, Budget will bring focus in monitoring expenditure towards productive asset creationthus increasing the capital formation in the system in building capacities.

Samir Bimal, Country Head, ING Private Banking India

The Union Budget for 2011-12 would be prepared on the back of challenging macro economic environment such as high inflation, interest rates, high current account deficit, IIP coming down etc., besides State elections during May-June. The next financial year would also be the last year of the 11th Five Year Plan. The high fiscal deficit would restrict effective management of inflation by monetary policy. The supply side inflationary pressures may be addressed by committing more resources to capital expenditure. The food inflation is a serious concern and the Prime Minister said a lasting solution to tackling high food inflation lay in improving farm productivity. Hence more budgetary push for increasing productivity is expected viz. agriculture research, tax benefit on agricultural tools and other mechanization equipment etc. In view of the above, the finance minister is expected to present a more balanced budget with a priority to keep fiscal deficit under control while facilitating inclusive growth.

Minakshi Batra, Director India, IDA Ireland

“Over the last two years, the government has introduced a host of economy-boosting policies such asthe ‘Ten point economic stimulus package’ as well as RBI’s interest rate-cum-monetary policy to cushionthe impact of the global financial crisis. While these initiatives have helped the country accelerate itsgrowth levels, our aspirations of crossing the double digit growth threshold still remains unfulfilled.
At a macro level, controlling fiscal deficit is a direct function of controlling inflation, which can beachieved through reduction in import duties and integration with the global marketplace. The risinginflation is a reflection of the sorry state of affairs with regards to food related infrastructure andstorage in India. While road infrastructure has been given its due focus and attention, the governmentneeds to consider the potentially accruable benefits by infusing technological advancements in itsinfrastructural framework of the agriculture and food industry. Another closely linked issue here is thatof rising fuel prices. While petrol prices were deregulated in the pursuit of controlling fiscal deficit, thegovernment should now consider freeing up diesel prices as well.
In terms of budget expectations from specific sectors, I would like to highlight BFS and Pharmaceuticalsverticals which are unarguably amongst the growth drivers of the country. While the IT-ITeS industryhas more or less stabilized on the back of sufficient SOPs over a period of time, the pharmaceuticalsector in India currently grows at 11-12%, which is lagging as compared to the global growth levels by5-6%. The government's Vision 2015 statement had indicated an 18%+ CAGR for the pharmaceuticalsector, translating to doubling of revenues to $40 billion over the next five years. Towards this end, theGovernment should try to ensure that critical drugs are available at affordable prices which could bedone by rationalizing duties and encouraging competition. In the Banking sector, a concerted efforttowards boosting ‘mobile banking’ would accelerate the growth of this industry. As the penetration oftelecom services grow at a rapid rate, such a system will bring more individuals into the banking fold.’’

Hari Kiran, MD, Sujana Energy.

India should create an M&A favourable environment
FM should facilitate Outward / International M&A activities to help
Indian companies increase their global foot print.
The Indian Union Budget for 2011 should focus on creating an outward/International M&A focused environment. This will not only ensure increase of Indian companies foot print to access more resources, better manufacturing skills but also to diversify the overall debt portfolio. As case point being China’s huge move towards international acquisitions in the areas of Energy, Natural Resources, etc.
However, to protect local manufacturing industry import & anti-dumping duties may be continued if not majorly increased.

Dilip Modi, President, ASSOCHAM and Managing Director, Spice Communications

“The guiding principle has to be sustainable growth with fiscal consolidation and good governance. Budgetary allocations must increase to address infrastructure gaps both in physical and social infrastructure, especially in connectivity and broadband. Incentives for investments in mobile value added services will leverage investments in digital highways. Further, right incentive structure to increase private sector participation in infrastructure will help unleash the entrepreneurial potential of India’s growing pool of talent, and help the economy grow much faster. Government should retain the stimulus to make the infrastructure sector attractive for the private sector participation as well FDI. Flip should be provided to health, education, technology research, rural development and livelihood support programmes. Budget should deliver an enabling environment to facilitate financial inclusion by allowing multiple business models including microfinance, more banking correspondents, mobile banking and other capitalized institutions to reach unbanked sector in remote areas. It is equally important to reduce subsidies and direct more funds by way of capital expenditure rather than consumption expenditure. Budget should also pave the way for increased manufacturing competitiveness with focus on SMEs.”

Hitesh Obeori, MD & CEO, Info Edge

As a young company in the young internet sector which caters to the basic aspirations of young people in this country (Jobs, Education, Housing) we want the FM to 1) Give special status to the Internet sector which can be as transformative for the economy in the next ten years as the telecom sector was in the last ten. It can help create hundreds of thousands of new jobs while at the same time help transform and make more efficient virtually every sector of the economy – Business, Governance, Commerce, Communication, Education and Entertainment. The government should extend some fiscal benefits to companies which operate in this space.2) The youth want high quality education and jobs. On the other hand companies continue to face a talent crunch. The FM should increase the allocation for higher and technical education especially in areas like Engineering, Management and Vocational Courses.3) Lastly the more immediate need is to ensure that we keep the wheels of the economy moving. The high rate of inflation we see today is because of a combination of high oil prices and domestic supply side constraints. High interest rates will hurt investment which will result in even more supply side issues going forward. We need to provide easy financing to companies at reasonable interest rates to ensure that infrastructure projects keep moving.

Mr. B G Jain – Chairman & MD, Nakoda Ltd.

For Polyester Filament Yarns segment, like everybody else, Nakoda too expects that this year’s budget will be conducive to maintain annual growth of more than 9% in the years to come.
So far as Polyester industry is concerned it is also growing at a CAGR of more than 10% for the past two decades. To a large extent, this growth is on account of shortage of cotton due to ever increasing demand of various fibres. Because of increase in Polyester Filament, there is an increase in per capita consumption of various textile products and other end-users like technical textiles. We feel that in order to sustain industrial growth in Polyester segment to the existing level of 10%, the duty on polyester products should be brought at par with cotton i.e. 4%. It may be mentioned that Excise Duty of Polyester Yarn was increased to 10% in the last budget. We expect that duty @ 4% would not only boost investment in polyester sector, but will also contain pressure on ever rising demand of cotton fibre.
For renewable energy, we apprehend that there is a proposal to discontinue tax holiday given to income from renewable energy u/s 80 IA of Income Tax. The Wind Power production is still not very viable for Independent Power Producers (IPPs). Withdrawal of any incentives would be counter productive to further investment in this sector. On the contrary there is need for providing more incentives to this industry.
It is also desirable that the manufacturers of Wind Turbines get exemption of Excise Duty on their raw-materials. Since Wind Turbines are exempted from Excise Duty, they do not get any MODVAT advantage. Abolishing of Excise Duty on their raw-materials would help in reduction of Wind Turbine prices which will eventually make Wind Power Projects more viable.

S.Sundaresan, President, All India Coir Mattress Manufacturers' Association

Presently the Rubberised Coir Industry is facing several hardships as compared to the same time last year. Firstly the price of basic raw material Latex rubber has shot up tremendously that many of the small scale units or under the pressure of closure. We appeal to Hon'ble Finance Minister to arrange for supply of Latex Rubber at a concessional rate with a quota system for the SSI units. We consume only three percent of the annual production which is around 9 Lakhs Tons. Further the Coir Board had initiated several years ago Eco-Mark Labelling scheme to encourage our Industry which is yet to take off. We appeal to Govt. of India for immediate commencing of this scheme. Further we also request for increased export incentives for coir based products which will help several thousands of families producing coir fibre and allied items. The coir industry which is agro-based and making eco-friendly traditiional products is almost on the verge of sinking. Hence immediate help from Govt. of India would be of immense benefit for the near survival of coir industry.

Mr. Gaurav Marya, President of Franchise India Holdings Ltd

What is in store for the Franchise Fraternity?Expansion through set up of franchised stores has become one of the preferred business models for retailers in recent times. The Indian regulations do not provide for any specific legislation regulating franchise arrangement in India. One of the prominent reason being the intricacy of the relationship between the parties and the applicability of various laws depending on the nature of such relationships. Thus, the foremost expectation from the Union Budget 2011-12 would be to grant long awaited legitimacy to the franchise business. The laws regulating franchising in India come within the ambit of Indian company law under the specific heads relating to contract, agency, distribution, leasing, assignment, securities, financial investments, intellectual and other legislations, which may become applicable in particular case. Another important aspect which needs clarity is the tax implications in the franchise business such as the applicability of local sales tax, service tax, property tax, and withholdings tax. Further, how the franchise arrangement is structured and the existence of treaties while dealing with other countries may have considerable influence on the structure adopted between the parties. Till date there has been a lot of ambiguity on the application of service tax in the franchise business despite of having a notification relating to the same. As stated in the notification dated 2003, service tax is payable on the gross amount charged by the franchisor from the franchisee in relation to franchise. The notification attracts numerous doubts on the scope of activities covered and the applicability of the provisions as stated there under. Considering the loopholes in the exact definition and attached ambiguities, the said notification has been an instrument of tax evasion. It is significant to highlight in detail the broader service tax implications in various industries. As an instance, under the Indian service tax law the educational institutes are exempted from the applicability of service tax. However, in franchise business relating to education, the individual service provider is not exempted from the Service Tax Registration and payment if he/she is a franchisee where the turnover of the franchisor is above the exemption limit. Thus it is consequential that all the franchisees will have to get registration with service tax department, collect the service tax from students and deposit the same to the Government even if their individual turnover does not reach the exemption threshold. Such provisions need a critical evaluation in the upcoming Budget 2011-12. Also, the government has received inputs from various sections of the society on opening up of the FDI(Foreign Direct Investment) and the industry is hopeful of at least a thought provocation, if not, a decision on this policy matter in the coming budget. Similarly, the dual taxation aspect in franchising also needs a profound view by the finance minister. Presently, the Indian franchisor is bearing the applicability of dual taxation of service tax and state taxes (VAT, CST) depending on the nature of services/ product sold. Franchise industry has been looking forward to several regulatory as well as policy reforms to facilitate its growth. It is quite evident that the present structure relating to franchise business is not beneficial for the vigorously growing franchise industry. While abolishing the impact of dual taxation, application of a uniform GST, will have its own implications, it is also the need of the hour to integrate the tax structures arising in a franchise business from a long term perspective.

Sanketh Arouje, Leader – Economic Analysis Group, Dun & Bradstreet India

IT/ITES Sector 1. Continuation of the tax benefits provisions under STPI schemeIn the last union budget, the government had extended tax benefits for units in STPI by another year till March 2011. Units set up in these parks are eligible for a 10-year tax holiday if they are notified before March 2012 and become oper­ational before March 2014. Even as the DTC is expected to be introduced from April 01, 2012, it would anyway do away with the tax holiday; thus the benefit could be extended by one year. Large IT companies would be able to alleviate the tax burden arising from the expiry of tax holiday by moving into SEZs. However, SMBs, which form the bulk of the companies registered with STPI, will be severely affected, as they are still struggling in the post recession period and do not have the financial resources to face this challenge. 2. Bring STPI incentives at par with SEZ The STPIs incentives are expected to be brought at par with SEZs. The industry expects that the disparity of treatment between the STPI and the SEZ units to be removed. The government should allow the STP units to transfer under the SEZ scheme. If under the new DTC the tax holiday is not made available for the STP units, the only way in which STP units can avail of tax holiday under the DTC, would be, to shift to SEZ. 3. Increase spending on e-governance projects The industry hopes that the government will increase its focus on e-governance projects. Recently, the government has made several investments in areas such as the computerisation of its various departments and investing in programmes such as NeGP and the UID project. It is expected that the government will continue to invest in these kinds of projects which will help the domestic market grow in a sustainable manner.

Mr. Hanuman Tripathi, Founder, Infrasoft Technologies Limited

1. There is an ongoing controversy of taxation on packaged software solution in India regarding a component of VAT which is applicable for license sale and a component of Service Tax that is applicable on implementation & support services of packaged software. There is also confusion with regards to government wanting to apply excise duty on domestically produced software and custom duty on imported software. We also keep getting enquiries from local Octroi authorities, besides getting demands from Octroi department stating that software is a ‘GOOD’ and it has to be charged with Octroi. All this is harassment of the IT industry which has contributed significantly to the country’s growth & fame in the last 10 years. This must be sorted as an important tax regime very quickly. A standardized GST on all these items will resolve all the problems. The Central Government should give clear directives to Excise Department and State Government on not creating their own interpretation of what is software and what are finished goods. 2. Space in STP/SEZs should be made available at discounted rates, to mid size/mid cap companies who already don't have a software factory in a STP/SEZ. This will create large delivery capacity at lower real estate costs. Rapidly rising real estate costs in all large Indian cities threatens to become a deterrent in India's software industry competitive advantage soon. 3. Government should give some kind of export incentives for mid-sized and small companies. 4. Government should also incentivize people working in Financial Inclusion space as they are going to contribute to the vertical growth in a very big way in areas of removal of poverty and illiteracy from the face of the country and help in creating a transparent census. Disclaimer: The views expressed here are solely of the author and not that of the company. Both, the author and the company cannot be held responsible for the accuracy of the information

Captain Uday Palsule - Managing Director - Spear Logistics Pvt.Ltd.

"Two major areas of change expected from budget will be soft (legislative) and the hard (infrastructure) changes. Infrastructure changes have long term gestation period and derive confidence from the soft changes. They are underway and will happen. Soft changes are critical and have the ability to transform logistics networks and reduce overall costs for the country up to about 3-4%! First, conferring “ industry status” to Logistics industry will provide great focus and leverage for actioning large number of reforms which have been hanging fire. Industry will have strong representation for clarity on Service Tax, implementation for Carriers Act, Reforms in Carrier liability in Insurance. These changes will reduce undefined risk, attract investment in the industry, cut paperwork and make the industry more efficient. Implementing GST is a pathbreaking change which will transform the way business is carried out in India. It will integrate the logistics networks, enforce larger, smarter warehouses and most of all lower inventories. This will invite organized players into contract logistics and make the industry more sophisticated."

Samson Arthur, GM - Quinn India

With Indian and Global economies moving away from turbulent times and returning to normalcy, certain measures in Union Budget 2011-12 will aid speed-up the growth process. And I hope Finance Minister Sri Pranab Mukherjee will present a budget that will augment growth and prosperity in every aspect in India.
While, Finance Minister Sri Pranab Mukherjee has certainly presented a very good Budget last year, best suiting the need of the times then; similar progressive measures are expected from him this time around too.
I recollect a famous quotation of Mahatma Gandhi who said, “Democracy is the art and science of mobilizing the entire physical, economic and spiritual resources of various sections of the people in the service of the common good of all.” And I sincerely would like to see this budget uniting our capabilities to build a better tomorrow.
Personally, I would like to see an increased focus on infrastructure development – an aspect which can propel India to a new level of auto-accelerated growth. With this we could certainly expect the GDP to exceed the highs from previous years.

Vibha Padalkar, Chief Financial Officer, HDFC Life

No radical changes are expected in the Finance Budget 2011, as the Direct Tax Code is on its way in2012.
Life Insurance industry is expecting separate limit of Rs.50,000/-for the life insurance premium, apartfrom the deduction u/s 80C of Rs.1 lac and Rs.20,000/- for Infrastructure bonds. Availability of separatetax exemption for life Insurance premium will boost the Life insurance industry, as the tax payerswill look at it as a tax savings device. This will ensure better insurance penetration in the country.Currently, the total tax savings such as PPF, Life insurance premiums, PF contributions, National SavingsCertificates etc are covered under Rs.1 lakh limit u/s 80C of the Income tax Act.

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Krishna Ramachandran, Chief Financial Officer, ACIS - A company of Allianz

In the past, Budget has always been a time where people and corporates looked forward to reduction in tax slabs or for some new breaks. Now that the tax structure has stabilised and become structured, it is important for the budget to look at structural reforms and stability in the government spending as well as the social and environmental infrastructure of the country. My recommendations or wish list for the budgets are as under:
Government reforms: a) Corporatize Railways, Indian Posts, Ports, Airports authority and Highways authority, thereby moving out the financial and administrative responsibility from the government. This will also enhance investment in infrastructure by providing these companies access to domestic and international debt and equity markets. b) Reduce the manpower at the clerical level as per the earlier Pay Commission reports. c) Enhance the digitisation in the government tax departments to plug revenue leakage and enhance tax flows. d) Speeden up e-governance to improve transparency and speed. Points c and can be funded by way of a special technology cess on tax collections, replacing what was originally an oil cess. Cess money is retained by the Central Government
Build social and environmental infrastructure: a) Set up a national monitoring watchdog for social and environmental infrastructure, which in addition to being a watchdog will also monitor and report on the implementation of the conditions laid out by the environment ministry for clearances of large projects. b) Provide fiscal disincentives to corporates who damage the existing social and environmental resources. c) Provide enhanced benefits to those corprates who are investing in social infrastructure. d) Set up a national program to channelize CSR funds of small corporates and individuals into a structured program, like rural schooling, healthcare or sanitation. e) Set up targets or conditions for social development or CSR for approvals of large projects including FIPB projects.
Additional taxes: Of course there is still some potential for additional taxes which can be used to fund our social and environmental infrastructure or rather prevent environmental damage. These include, a) Tax agricultural income a certain limit, say Rs 500,000 per annum. Additional taxes can be used for environmental protection. b) Excise duty on beedis to be enhanced for both handmade and machine made. Additional funds to be used solely for healthcare. c) Education cess on mining and petroleum extraction solely to fund rural schooling. d) Registration fees and License fees on private courier and transport companies, to find the deficit of the government postal services in rural areas.

Arup Roy - Principal Research Analyst, Gartner

Critical success factor in the overall growth and development of Indian ICT industry would depend a lot on government's focus and investments thereof in the development and upliftment of 1) Infrastructure - hassle free infrastructure to enable smooth business operation, hence would expect investments in development of world-class infrastructure such as roads, power, public transportation within cities, domestic and international air connectivity, a robust telecommunications infrastructure, and quality real estate. Insufficient infrastructure is a major bottleneck in the growth of India's IT industry, investments in the infrastructure and education will give a big boost to the offshore IT industry in the long run 2) Education - expect investments in revamping the educational sector so that in the longer time frame India is able to produce creative, lateral-thinking graduates rather than just task-oriented "doers" 3) On-Time implementation of projects - All plans and project geared towards development, growth, upliftment vastly lose its meaning if it is not implemented on time. The entire government and bureaucratic machinery has to radically change its ways and means of execution so that "on-time" implementation is achieved. Of course it is the most difficult challenge but it could be achieved if driven from top down with tight checks and balances. If all these points are addressed well then it automatically would result in the growth of FDIs and India centric business. In terms of taxes and other sops (STPI and the debate thereof), I think the Indian IT industry has developed its own momentum now and can sustain on its own. In order to boost entrepreneurship, small scale providers perhaps they should look at Tierization of companies and those falling in the lowest tier should be the ones to enjoy those tax and other benefits. As an example – in order to let small providers participate in the e-governance projects in India, a certainly percentage of work (say 25%) should be reserved for bidding only by the small providers. These are perhaps the best times for India in terms of economic growth and the government should make every effort to use this momentum to create further opportunities of growth.

K.Venkataraman, Chennai

Dr.Indiresan has made a beautiful analysis of the causes for the murder of Mr.Sonawane an IAS officer who was holding a post of Additional Collector in Maharashtra. However, none of the three suggestions, viz., higher pay for the politicians, abolishing of family owned parties and the state meeting the expenses of serious electoral candidates are workable and practicable. Greed in the human being can not be satiated by any amount of increase in remuneration, particularly for the politicians. The oil mafia and consequent death of a government servant has not been taking place for the first time. Earlier Mr.Manjunath an officer of the Indian oil corporation was brutally killed in Uttar Pradesh. Successive Governments are responsible for such lop sided policies of creating differential pricing in petroleum products to meet the fuel requirement of the poor. The said policy doesn’t benefit the poor, but only enables rampant adulteration and smuggling of the scarce resource to neighboring countries causing heavy leakages in the system. Although serious and honest introspection is the need of the hour by the policy makers, an ostrich like attitude prevails leading to supply and demand imbalances. Such problems and consequent mafia arise not just in oil alone, but in mining, quarrying of sand for construction purposes, supply of rice and food articles in near throw away prices through PDS and also earlier constraints created in the import of gold ornaments. One may appreciate the fact that liberalization of the import of gold ornaments by the Indian tourists visiting abroad during the early part of this millennium has greatly eased the problem of smuggling of such precious metal.
Therefore, system corrections taking into consideration national interest & population at large are the need of the hour. We wish the ensuing budget takes into consideration such chronic problems afflicting our society.

K K Mital, PMS Head, Globe Capital

The Union Budget 2011-12 is round the corner, and this budget is a real testing time for the finance minister. It is coming at a
critical time when a lot of macro level challenges like escalating food inflation, rising crude prices, high current account deficit,governance issues and difficult task of sustaining the growth momentum are making the headlines.
A comfortable and unstoppable Indian growth story has suddenly come under the threat of moderation due to factors such asescalating inflation, tight liquidity, rising interest rates, southward facing investments in industrial as well as infrastructuresectors and top of them the governance and corruption issues which have impaired the investors’ sentiments to a large extent.Given the current political landscape and with elections due in some States, carrying forward the fiscal reforms along withmaintaining the growth momentum would be a tough call.

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Sanketh Arouje, Leader – Economic Analysis Group, Dun & Bradstreet India

1. Continuation of the tax benefits provisions under STPI schemeIn the last union budget, the government had extended tax benefits for units in STPI by another year till March 2011. Units set up in these parks are eligible for a 10-year tax holiday if they are notified before March 2012 and become oper­ational before March 2014. Even as the DTC is expected to be introduced from April 01, 2012, it would anyway do away with the tax holiday; thus the benefit could be extended by one year. Large IT companies would be able to alleviate the tax burden arising from the expiry of tax holiday by moving into SEZs. However, SMBs, which form the bulk of the companies registered with STPI, will be severely affected, as they are still struggling in the post recession period and do not have the financial resources to face this challenge. 2. Bring STPI incentives at par with SEZ The STPIs incentives are expected to be brought at par with SEZs. The industry expects that the disparity of treatment between the STPI and the SEZ units to be removed. The government should allow the STP units to transfer under the SEZ scheme. If under the new DTC the tax holiday is not made available for the STP units, the only way in which STP units can avail of tax holiday under the DTC, would be, to shift to SEZ. 3. Increase spending on e-governance projects The industry hopes that the government will increase its focus on e-governance projects. Recently, the government has made several investments in areas such as the computerisation of its various departments and investing in programmes such as NeGP and the UID project. It is expected that the government will continue to invest in these kinds of projects which will help the domestic market grow in a sustainable manner.

O. N. Jayakumar, Tutocorin Alkali Chemicals and Fertilizers Ltd.,

Combating and Controlling Corruption, Black Money and Inflation
This year's budget should mainly focus on unearthing unaccounted money and put them for productive purposes. In order to have a good control over parallel economy, it is suggested that a 2% tax on agricultural income over and above Rs. 10 lakhs per assessee may be levied to plug the loophole in the economy.
A surcharge may be levied at 10 paise per unit on electricity consumption wherever exemption in payment is given so that misuse and leakage of power is easily traced.
Non-corporate assessees maybe asked to furnish their assets and liabilities (exceeding one lakh rupees) every year in their returns as a piece of information . An efficient banking transaction tax on huge cash transactions can be introduced linking it to unique identification number.
The government can introduce subsidy to the low nitrogenous fertilizers like Ammonium Chloride which is hitherto not covered under the subsidy scheme so that they are made available cheap to the farmers.
Exemption maybe given from MAT to sick companies who are just recovering and also reducing the MAT rate for the other companies in order to mitigate the hardship of spiraling interest rates. Lot of amendments have to made under the Income-Tax Act and other statues to take care of IFRS implementation effective April 2011.

Ramesh Loganathan, VP - Products and Managing Director, Progress Software-India

I would like to see incentives in the IT act for promoting new Software startups and Product companies based on intellectual property/original product creation which is again a key element to ensure that the industry is forward looking beyond just services. From an IT sector perspective, I would definitely expect the government to extend the STPI tax benefit under section 10A & 10B of Income tax act considering that the industry is on a rebound now it will be good to extend this for some more time as that will help further fuel investments pumped back into the growth of the industry.
Another aspect that I am expecting from the Union Budget this year, is Funds allocation, possibly as part of extending the National Skills Development program that promotes more research scholars and PhD candidates in the universities which is again essential if we were to look forward some years ahead since for a country our size, with the large number of universities and science & tech graduates, we have a dismally low number of PhDs.

Suman Reddy, MD, Pegasystems India

“Fiscal consolidation, inflation and growth will form the core of issues for Budget 2011 and the expectations from Honorable Finance Minister Sri Pranab Mukherjee will be to come up with policies and measures to provide a better balance for the key issues. From an IT perspective, a definitive statement on the extension of STPI scheme under Sec 10 (A) is anticipated. The real benefit of this can be attained when the Tax benefits under this scheme are extended to not just big Corporations but also to entrepreneurs and new businesses. In the current scenario, only those companies located in a SEZ get Tax benefits and I hope, Finance Minister would earmark budget this year and create alternative schemes for entrepreneurs and new entrants, so it provides level playing field for the smaller companies to compete with the established ones. Also, I hope to see PPP model (public-private partnership) being adopted in the education sector as it would establish success and create sustainable growth in long-term. While the government’s role could be that of funding the projects, it is the execution ability of the private sector which needs to be banked upon for successful implementation of the model.”

Hemindra Hazari, Head of Research - Karvy Stock Broking

Simplification and Rationalization of the Contemporary Tax System would be on the wish list as the Government of India should not allow the deadlock on GST (Goods and Service Tax) to remain for an extensive period. It should finish the legal procedures by discussing with the various states and settle all unfinished matters associated to the implementation in order that the new taxation system can be introduced from April 1, 2012 to permit current players to devise their ventures and include their cost of operation. At this moment, it is highly advised that the rate of CST should be cut down to minimum 1% wef from April 1, 2011.
Infrastructure development is the core ingredient to attain and sustain 9% or perhaps double-digit economic growth. Government needs to roll out few incentive schemes to encourage private sector participation and step up investment in the infrastructure sector, especially in power, road, telecom, ports and airports projects
In order to boost Agriculture the government should introduce positive initiatives to attract investments in this sector. Since giving subsidy on fertilizers would impact its subsidy bill which is already stretched due to higher global crude prices, so the expectation from the government would be to come up with a nutrient based policy which favors the fertilizer manufacturing companies.
IT industry has also been contributing immensely to the GDP and to keep the momentum on, industry would appreciate government to oblige by simplifying the tax structure that would encourage investments in the sector and also extend tax benefits under the Software Technology Parks of India (STPI) scheme. From a common man’s perspective, tackling inflation would be of utmost priority along with continuation of stimulus packages. Considering the present inflationary pressures in a difficult macroeconomic environment, we would expect that the rate of basic customs duty should be brought down.

Mr. Sanjay Kaul - Managing Director & Chief Executive Officer of NCMSL

Agri Infrastructure and Warehousing needs Special Attention – Mr. Sanjay Kaul, MD &CEO, NCMSL It is unfortunate that despite fervent pleas by industry the agri-warehousing and cold chain sector has not been granted “infrastructure status”. There is an estimated 32 million shortage in storage capacity, and even conservative estimates put the immediate investment requirement at Rs. 10000 crore. The Finance Minister had amended section 35 AD of the Income Tax Act to permit full depreciation to be charged in the year of investment. This concession has proved inadequate as it amounts only to a tax deferral and provided no tangible tax relief. It is only the grant of infrastructure status that will provide a major fillip for investment in this vital sector. Agri warehousing currently receives a marginal subsidy through a NABARD implemented scheme. This minuscule subsidy has not helped make investment in warehousing viable. In addition, NABARD under a new window of direct financing should provide direct loans at lower rate of interest to the private sector for warehousing, integrated supply / cold chain and allied infrastructure development activities in the rural areas, under RIDF funds. Mere refinancing and state loans does not comply fully with NABARD’s mandate or purpose for which it was created There is also need to eliminate the need for different VAT registration numbers across states for entities and individuals license by the newly set up Warehouse Development and Regulatory Authority [WDRA]. In fact, VAT / CST should apply only when physical transfer of agriculture produce takes place. This will encourage free movement and trade and serve to stabilize prices of agricultural commodities across the country.

Asok Subrahmanyam

Energy Management
Energy is the most wanted commodity of this decade and its misuse to be stopped at any cost.
We are experiencing 3 to 4 hours of power shutdown these days but the road dividers are equipped with sign boards at every 10-15 feet distance with 4 X 32 W fluorescent lights for about 20 KMs of stretch. How can we afford this?
Use of non conventional energy sources can be promoted thru soft loans by Govt / Employees to their staff, incentives on property tax and electricity charges on use of solar water heating systems and solar lights. Advancement of clock by an hour or so can enhance energy security. Scattered office / school / college timings can also reduce energy consumption by means of traffic reduction during peak hours. Its other benefits are reduced noise levels, less pollution, improved health of the public and reduction in road accidents. This is achievable thru a small group of working professionals in various ways of life under the guidance of respective district collectors.
I wish these points are addressed in the union budget and in parliament.

G.K.Murthy, Chief Manager, Vijaya Bank, Bangalore

Focus on Human side of Growth;
To say that it is the prime responsibility of any Sovereign State to ensure the wellbeing of the masses is to stress the obvious; Our Country in recent times has almostcatapulted itself into the League of Big Nations by virtue of its economic might,increasing clout in the comity of Nations, et al. The GDP by any reckoning is goingto touch 8.5-9% by end Fiscal 2011. But with headline Inflation at 8.2% and Foodprice Inflation at 11.05% , the Inflation adjusted wellbeing of the common man(whether he really matters?) is any body’s guess. Add to that the slew of incidencescorruption in different facets of the economy (not even sparing the mighty scientificcommunity) which has surfaced( or resurfaced?) in the country in recent times thatvirtually robs the credibility out of the whole Governance process.
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G Murlidhar, Chief Operating Officer, Kotak Mahindra Old Mutual Life Insurance

The budget should introduce measures that should help gravitate to a situation where people around the country have easy access to affordable life and health insurance. One of the greatest challenges facing the country is under-penetration of insurance with the challenge most accentuated in the rural and semi urban areas. Enhanced tax sops for investing into insurance and additional sops that encourage rural and semi urban citizens to insure themselves will not only go a long way in enhancing the appeal of insurance among all sections of society but also better the penetration numbers. In a country where no defined universal social security mechanisms exist, the safety net insurance provides will go a long way in reducing strain on individuals and the over-stretched governmental outreach frameworks and help better manage the ever ballooning social sector spending. Reducing tax rates could be more cost effective to direct social security. Key national development projects are contingent on greater long term funds mobilization. Insurance companies are among the biggest mobilizers of long term funds. Policy intervention is crucial to help insurance companies assist the government in achieving its ambitious financial inclusion and fund mobilization goals.

G Narasimha Raghavan, Jansons School of Business, Coimbatore

I would like to tell the Finance Minister that on the basis of ‘Education for All’ policy of the government, there is a need for not just a larger allocation of funds to promote compulsory primary education, but also to help in establishing a structure for ensuring that all children get the benefit of education. Besides, would also like to tell you that many schools need funds, not just for better infrastructure, but also for buying computers and library books. I would also suggest that many children in rural areas also need assistance in purchasing uniforms. This will help in improving the quality of education of our children.

R.Kannan

India is in a best position to do very well in the world economy today. The growth momentum in the last two years need to be continued. This is the time Indian Industries and Services require the continued boost for development. There is a need to continue the stimulus in the budget this year and increase the planned and non planned expenditure by at least 15% this year. The schemes relating to Rural and Urban poor should be continued . A minimum GDP growth of 9% could be set as the minimum target for growth. To meet the increased expenditure, there will be a need to mobilize more resources. The borrowing by government could be kept at last years’ level and interest rate expectations on the borrowing should be kept at the present levels which would help to moderate the inflationary expectations. To bridge the funding gap, innovative methods for mobilizing funds from non conventional sources including Capitalisation of land bank ( which US government has identified as one of the sources of funding in this budget ), additional collection from Telecom operators and mining licenses. Sectors like Agriculture including milk production have become profitable now and there is a need to review the subsidy to this sector and target the subsidies. A specific fund could be created for removing the bottlenecks in Infrastructure sector to use the available capacities in a optimal manner. A specific fund could be created for developing an organisation, systems and procedures to remove the mismatch in Demand and Supply of Agricultural commodities. Commercial Banks could be allowed to raise Infrastructure bonds and interest from these bonds could be exempt from tax.

S.C. Aggarwal, Founder, Poverty Trust, New Delhi

In order to solve the problem of poverty, hunger, corruption from villages and to raise the standard of living of people residing in villages I hope the Hon'ble Finance Minister will introduce a proposal in the Finance Bill 2011 so that it can be known as Poverty Eradication Bill 2011.
"Any expenditure incurred by a company to develop villages where directors were born or on the development of directors' ancestral villages (if situated in India) shall be allowed as revenue expenditure while computing income liable to tax".
I further expect the Finance Minister shall allow Individuals also to develop their native/ancestral villages by allowing 100% deduction of expenses incurred on development while computing income liable to tax.
Reasons: This will help the Government to overcome the problems - poverty, hunger and corruption etc which have arisen due to non-monitoring of the schemes to uplift the poor.

V S Sankaran, Madurai

It is felt that the Agricultural Sector has been neglected for the last half a century, even though more than 60 per cent of the population is dependant on it. The Government spending on Agriculture does not reach the rural poor and it is dissipated in corruption. The most talked about Guaranteed Rural Employment Scheme did not intend for wealth creation but it may be employed for vote catching’ Also creates labour shortage for seasonal agricultural operations.. The Government should allow organized retail sectors from established Corporate bodies either from Foreign Investment or raising their own capital through Banks and Financial Companies. The Retail Sector should adopt in one District or other and work with the local Agricultural Departments. They should organize contiguity group of farmers for raising food crops , vegetables , millets and pulses .in their lands according to their soil and rain falls. The Retail sectors must depute educated youth for doing extension services along with the Department of Agriculture. The workers should be given incentives to work in rural areas. All investments and minor infrastructures must be borne by the companies. The Companies must purchase the produces with a minimum guaranteed return per acre. The Govt. should give enormous tax concessions and also should be encouraged to bring in their black moneys so invested in exclusively for Agriculture and allied activities. They must also bring in modern techniques for food processing. In short the agriculture should be linked to private Corporate bodies and should monitors the results and the success stories should be published in media. For attracting youths in Agriculture and educate the farmers employing their own traditional way of agriculture. The Agriculture problem will not be solved by macro planing and the corporate bodies who are willing to work with the farmers in the lands would usher in a new era in agriculture. The Govt. Should give a try to this proposal.

Ramakrishna G

Small savings in India played a vital role in Indian Economy. To boost the small savings FM should take initiatives like u/s 80C the cap should be increased to 1.5 L from 1.0 L.

Ettirankandath Krishnadas, Inspector of Customs, Central Excise & Service, Palakkad

The Cenvat trauma and cascading effect.
The growing commodity price rise and input raw material costs have provedthat the Modvat and the more liberal Cenvat scheme, is neither a boon tothe manufacturer and Service Provider nor the ultimate customer and ineffect, it is nothing but revenue out go. Fixing higher rate of duty andcontrolling the cascading effect by providing the credit chain facility hasproved ineffective and as such it is felt that lowering the tax rates with thecredit chain facility with a specific time lag for utilization and refund as isprevalent in VAT schemes in some of the states will be more practical.

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B.N.Bharath, Chief Manager, Specialised Mid Corporate Branch, SBI, Bengaluru

1. Food inflation is rising unabated. Though the Dearness Allowance payable to the salaried class keeps revised from time to time, it offsets the price rise to a limited extent only. Moreover, the commodities and various food items are already taxed by way of VAT, excise, slaes tax etc. The dearness allowance is taxed at the hands of the individual tax payers treating it as income, which in reality is not. Therefore it is nothing but double taxation. Hence, it is suggested that this element of DA, is to be made tax free. 2. Banks provide impetus to the overall economic development of the nation. It is imperative to encourage bank deposits. Interest income upto say, Rs.1 lac p.a., can be made tax free, so that people channelise their savings to this legal route rather than falling prey blade companies, uncertain stock market etc. 3. During the last 2-3 years financial meltdown took place in US, Europe etc. But India, was relatively, less affected, thanks to the high savings rate. It is time the finance minister encourages savings by individual tax payers. Investment in infrastructure and development related savings instruments is to be encouraged. 4. Salaried class are the prompt tax payers and most of the times end up paying over 30% of their monthly income as tax. To provide solace to them, Standard Deduction should be brought back just as the benefit of depreciation is available to business segment. 5. Government should encourage corporate, institutions to plant saplings in a big way going for something like corporate forests, to check global warming thereby protecting the environment. The encouragement can be in the form of sort of tax concession as in case of wind energy etc.

Dr. K. U. Mada, Director, Economist and Company, Mumbai

TUNING IN PERSONAL TAXATION TO INFLATION
The Budget should tune in personal taxation in the context of raging inflation and the need for sustaining saving in the economy. Inflation essentially inflicts injury to the middle class, salaried class and middle level tax-paying individuals. One of the ways in the Indian Budgets, except for the last decade or so, is the too-frequent- change of tax rates, direct and indirect. FM should, as far as possible, avoid tinkering with changes in the rates to ensure that there is an element of stability injected into the system to facilitate planning by individuals, corporates and the rest.
The exemption limits of individuals, senior citizens and women should be raised by Rs. 20,000per year. The exemptions in recent years have been far from adequate to take care of inflationary pressures. Further, there is an immediate need to raise the 80C limit from Rs. 1 lakh to higher levels on a graduated basis. For income beyond Rs.10 lakhs, the exemption could remain at Rs.1 lakh, above Rs.20 lakhs at Rs.1.5 lakhs, above Rs.30 lakhs at Rs.2 lakhs, above Rs.40 lakhs at Rs.2.5 lakhs and above Rs.50 lakhs at Rs.3 lakhs. This would ensure a degree of equity and fairness. Also, obligations to family, community and society go higher with higher income. Having a uniform Rs.1 lakh which in the present inflationary context is far from adequate. The higher the income the higher should be the exemption limit. As one of the canons of taxation enjoins, it is a reward for earning more and paying tax.
In addition, infrastructure development is in focus and its core role in the next two decades of the Indian growth story is obvious and well-recognised. If the Government is serious about mobilizing funds through infrastructure companies, the higher amounts of investments in infrastructure bonds should be encouraged. Moreover, the entities concerned have got to meet fund-raising expenditures and the funds so raised should be a substantial part of their resources for being deployed in the infrastructure projects. As of now, the exemption limit under Section 80 CCF is restricted to Rs.20,000 irrespective of the income. It is suggested it should be linked to income at least up to Rs.50 lakhs and the amount could be on a percentage basis, say, 25% of the amount of exemption limit prescribed under Section 80 C, thereby establishing a linkage.
There is need for at least partial exemption of interest on term-deposits with scheduled banks. Income-tax reduces income from bank interest roughly by one-third; hence, at least 50% of the bank interest income should be exempt from income-tax, at least up to interest of Rs.10 lakhs, if not down the line for all tax-payers.

Ajan R Prabhu, D.H.S.School, Alappuzha

Nowadays, car loans and gold loans are cheaper than educational loans. Car loans result in more consumption of oil and global warming and gold loans are used for consumption purposes. Education loans produce better citizens and creates human capital and will be an asset for the nation. The Government should bring down interest rates on education loans and make them easily available without much hassles.

Mr. Debasis Chatterji, CEO, Netxcell Limited

The real challenge for the Honorable finance minister is to maintain the growthrate at around 8% while controlling the inflationary pressure in one hand andkeeping the money supply to the market intact on the other hand.
So, I would expect that the government will not only take necessary steps tocontrol the inflation but also ensure that the accurate quantity of money is suppliedto the markets to enable the GDP growth at around 8-9%.

Mr. Rakesh Jain- DIRECTOR - CORPORATE CENTER & CFO, ICICI Lombard General Insurance Company Ltd

1. Applicability of the provisions of Minimum Alternate Tax to General insurance companies Non Life Insurance Companies (NLIC) ought to be exempted from MAT as these companies do not enjoy any tax incentives. The insurance companies are required to prepare books of accounts as per the requirements of IRDA regulations. The insurance companies do not prepare accounts as per Schedule VI of the Companies Act which is prescribed under the provisions of MAT.

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Hemant Joshi, Partner, Deloitte Haskins & Sells

Nurture and protect the goose that lays the golden eggs
With urban cell phone penetration nearing 100% and rural cell phone penetration around 25%, government’s plans for enabling rural inclusion can set big boost through telecom in disseminating banking, healthcare, education, specialized offerings for fishermen, artisans, etc. through e-connectivity. The telecom sector is expected to be 15% of India’s GDP in few years. Therefore, it needs focus, attention and support of government through various financial measures. This industry is suffering from massive litigation on tax related issues which diverts business focus and attention. Few of them are listed below:

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Mr. Arshit Pathak, Managing Director , Kingtech Electronics ( India) pvt. Ltd.

1.Immediate implementation of GST to ensure a standard VAT across the states. Today different states have different VAT and some of them have entry tax and Octoroi. In case we operate at a uniform base price and apply taxes and other levies extra, it results in different customer price for the same product in different states and it encourages cross state movement of goods. This is not good for the industry, the local traders and even respective governments, as it leads to tax evasion. If we operate at a common customer price, by having a weighted average tax load, we end up burdening the consumers of the States which has a lower rate of tax but pays for the higher tax of other state.
2.The duty on mobile accessories like chargers and batteries need to be rationalised. When these accessories are imported as an in box item, it only attract a duty of 1%, essentially the duty of the handset. When it’s imported as an accessory the duty is as high as 27 %. This leads to huge price gap between the legitimate product and the product in grey market. Also products like Battery, charger can be a safety risk and health hazard, and therefore it’s important that use of safe and legitimate accessories be encouraged.
3.Tablet is an emerging product category and has a huge potential in digitalisation of education. An efficient tablet can be made be available at even half the price of a note book and can bridge the digital divide. We would recommend that this product should be treated like a communication device and not an IT device and duty should be rationalized accordingly. It will be great initiative towards digital education.

Manish Shah - Associate Director, Equity,Motilal Oswal Securities

This budget will be more closely watched given the “COALITION COMPROMISES” that the PM referred to, “ELECTIONS”, “HIGH INFLATION”, and “SUBSIDIES for the common man” excluding the one given to telecom subscribers. With Mr. Raja behind bars until a few days after the budget is announced could mean that the Parliament will function during the budget session. This is a positive and a relief for equity investors whose confidence and wealth have been impacted by 1) Inflation and rising interest rates; and (2) Ethical Deficit and its fallout on key decisions. However, given the forthcoming elections in Tamil Nadu, Kerala & West Bengal and COALITION COMPROMISES, the government may defer tough decisions on decontrolling diesel prices and curbing other subsidies until inflation cools off. At $100/bbl crude oil prices, losses could be in the region of `110,000-120,000 cr with the government’s 33% share at Rs. 35000-40000 cr as against Rs. 21000 cr for Apr-Dec-10. At 45% sharing as in 3QFY11, the burden rises to Rs. 50000-55000 cr. Fertilizer subsidy (Rs. 50000 cr BE) and food subsidies (Rs. 56000 cr BE) that were budgeted at 11% of FY11 budget expenditure are likely to expand with food inflation and higher oil price. A mechanism and framework for direct subsidy to end users being established is a positive. Direct money transfer to the rural consumer in the form of NREGA (Rs. 40100 cr BE) will continue to be the focus and could see its outlay rise with the rise in CPI (AL). The final fiscal deficit for FY11 is likely to be lower than the 5.5% budgeted due to Rs. 106000 cr inflow from the Telecom auctions. From companies, indirect tax changes could be minimal given that GST will be big change. Clarity on implementation of GST will be a positive. Additional services under the tax net is a possibility. The STPI clause extension for another year will be a keenly watched event from IT companies perspective. The Direct Tax Code being implemented in FY13 will mean cosmetic changes on income tax in the budget as a psychological relief to inflation burdened middle class. From a stock market perspective, we would keenly watch for clarity of taxation on Long-term under DTC as any tax on long-term gains could lead to profit booking before the tax comes into place. Another, key point will be disinvestment proceeds that could be below target for FY11 with a large target for FY12 to compensate the 3G inflows in FY11.

Vikram Kotak, Chief Investment Officer, Birla Sun Life Insurance

There is a dire need for a transformational budget as India is witnessing astonishing changes both at local and global levels. There are unanswered questions around slowdown in Industrial Capex, Interest rate stability, Inflation and Polluted Business Climate. It will be very important to see fiscal policy particularly on revenue expenditure discipline. This would require cuts in spending on defence, and a reduction in central government assistance to the states. Such cuts are necessary in an environment of high inflation and robust growth. They would also help create room for other high priority expenditure in areas like health and education.
India today needs almost $ 1 tn in next five year plan towards infrastructure spending. To achieve such ambitious target we need to have financing in place and domestic financing cannot even support half of total infra spending. There is a need to look at more innovative routes like creating special Infrastructure vehicles or reviving IIFCL. Also, budget should get more liberal to FDI route for many sectors and that can fund large part of our infrastructure deficit.
There is immense nervousness in the mind of decision makers and investors in India on the back of scams and backlash of the past. However, rural growth, aspiring middle class and strong and sustained demand are the silver linings. This is good time for the Finance Minister to fill the gap between strong growth and supply challenges by putting a solid execution road map for Infrastructure, GST and Direct tax code. Gujarat, Delhi & Bihar are good examples of sucess.
Times are challenging but opportunities are overwhelming. We need a transformation that fillips our progress & puts economy on a path that is in best interest of the country & society.

S. Raghunatha Prabhu, Punnapra

Personal Income-tax should be abolished. It would have been abolished years ago if at least 25 % of our politicians, who declare only subsistance- level income, paid any income-tax. Income tax forms just 2 % of the government's revenue. It could be recovered through an expenditure tax. Abolition of Income-tax will solve many problems such as tax-evasion, black money, filing and keeping Income-tax returns besides keeping a large number of income-tax personnel. 2-G spectrum scam lost us Rs.1,76,000 crore. S-band spectrum caused us a loss of Rs.2,00,000 crore. There are huge sums of Indian black money in foreign tax havens. So the honest salaried class deserves total income-tax exemption. Moreover, it is not those who work, earn and invest and indirectly contribute to the society's well being who should be taxed. The government should tax those who consume and get benefits from the society .Expenditure tax will serve this purpose better than Income-tax. Interest on Bank deposits should be exempted from income-tax. It is the salaried class and lower middle-income groups who deposit money in banks. The wealthier class prefers stock market and realty. Interest on bank deposits is the only source of additional income for most of the the lower-income groups and retired persons.Exempting bank deposit interest from income-tax will be a great relief for the bank depositors and banks will be saved from the tedious task of TDS. Banks will attract more deposits.

J. Balasubramanian, Madurai

In the present day scenario Service Sector Income is also a major contributor to the Gross Domestic Product (GDP) as compared to the Manufacturing Industry. Hence all the provisions contained in the Statutes governing Goods shall be suitably amended in the Statutes governing Services. Trade Discount is one such issue being discussed here. Trade Discount in any merchandise is a common phenomenon especially between Channels of distribution. The Valuation of Services under Service Tax Rules governed by Sec 67 of the Finance Act does not contain any specific provisions dealing with Trade Discount, whereas a specific provision is available in the Central Excise Act.

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Darius Pandole, Partner, New Silk Route Advisors

For the union budget 2011, the FM will have to balance the twin imperatives of encouragingdomestic demand and stimulating growth, whilst keeping the fiscal deficit and inflation undercontrol.
A prerequisite for domestic growth is channeling investments into Indian infrastructure, includinghealthcare and education. This would require increasing the availability and reducing the cost oflong term funding through dedicated infrastructure debt funds, fiscal incentives such as taxexemption of interest income from infrastructure bonds, and encouraging PPP models toimprove on-ground project execution. Improved infrastructure would lower the cost of doingbusiness in India, and provide multiplier benefits for the economy.

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Manish Mandhana, MD, Mandhana Industries Ltd.

The textile sector accounts for nearly 14% of the total industrial output and about 30% of the total exports, whereas the apparel industry in the biggest sector in foreign earnings sharing 12% of the country’s export total. In spite of this not much activity appears to be in effect from the Government’s side on strengthening the industry’s position. The first thing in demand by the industry would be to lift the indefinite abeyance on the fresh sanction of term loans under TUFS by banks, immediately and need security on it along with pumping of fresh investments in the sector. Secondly the country’s trade deficit is projected to touch a record US$ 135 billion this fiscal year and this widening trend is a macro economic concern for the country. Promoting exports is the need of the hour to beat this trend.

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Getamber Anand, Managing Director, ATS Group, Vice President (North), CREDAI

In any economy, Real Estate plays the role of one of the most important driving forces. More so in developing economies, wherein not only is the Real Estate an important economic driver but also facilitates social reengineering, inclusive growth and addresses various facets of urbanization. Hence it is time that Government takes practical cognizance of the vitally important role that the real estate sector plays in the Indian economy in the forthcoming Union Budget 2011-2012.
Some of the stark realities of India’s unequal distribution of growth is evident from the common statistics like 15% of the country’s urban population living in slums, 35% of all urban households living in single room dwellings, shortage in urban households currently being 25 million houses etc. It is time that the Union Budget takes serious cognizance to the issue and offer more sops under affordable housing.
In this budget, Rajiv Awas Yojana should be clarified and the ambiguities addressed to enable focussed activities under the Yojana. Furthermore, under affordable housing, government should consider incentivising the buyers, among others, through capitalization of interest subsidy so that contribution deficiency of potential customers could be addressed. This would create a demand which will provide stimulus to the developers to actively pursue this segment of the market in tier 3 and tier 4 locations.
I also expect the forthcoming budget to address the issue of the complex tax structure for the real estate sector. Government should work towards creating a nationwide, unified taxation system, which currently differs between states.

Hiranya Ashar, CFO, Rolta India

“It will be interesting to see how our Finance Minister will balance this budget between Inflation, Growth and Deficit. He has very little room to play on direct and indirect tax fronts as it will be difficult for him to make any fundamental changes which are different from DTC and GST. I think most of the proposals on Direct Taxes will be more or less a step towards DTC. From the IT Industry’s perspective there are 3 major items which we are expecting in this budget. The first one is the much talked about extension of STPI benefits under section 10A. Though many companies and industry associations have recommended STPI benefits to continue for a longer period and to be treated at par with SEZ benefits, I think in this budget at least one more year’s extension will be extremely helpful. The issue about continuance of STPI benefits under DTC can be taken up separately when DTC is discussed and passed by the parliament. The second item is the rate at which MAT is levied. The MAT regime started with a tax rate of 7.5% of book profits and now this rate has been increased to a whopping 20%. This rate is certainly too high and has a big impact on cash flows of all companies not only in the IT sector but other sectors as well. We expect that this rate should be reduced to a reasonable rate between 15-17% and if government wants to retain 20% rate for MAT at least the name of this tax should be changed to “Maximum Alternate Tax”!!. Third major item is on the indirect tax side where there is still no clarity on how software should be taxed, whether it is services or goods and whether service tax or VAT is applicable? This issue certainly gets addressed with the introduction of GST however since there are lot of uncertainties around GST implementation, immediate clarity of this issue from the government will be highly appreciated by the industry.”

G. M. Sundar, Chennai

Now we observe our economy is recovering; economic data confirming growth inall sectors, except agriculture due to deficit rainfall. We also appreciate the UnionGovernment's concern for rise in prices of essential commodities and their affordabilityby common man. It may be due to supply ; hoarding; increase in consumption due tobetter standard of living; Centre or State poor monitoring, etc. There are lot of assurancesabout the efforts of improving the supply and other actions. Ultimately, the history provesthat bringing down the price of a commodity is an extremely difficult task. Now, let us try to bring a change in the system of distribution of essential commodities.Issue of UID card is certain to bring about few benefits. In the meantime, Union shouldformulate a system to ensure that every household get their monthly quota of rice/wheat and dhal at a price fixed by Centre. Even we may go back to barter system;employees getting their essential goods as part of their pay. The situation is so seriousand it should be tackled only by Centre - Banks were nationalised to ensure free flowof credit to all, petroleum products are sold at fixed rates, power/fertilier is taken care and why not few essential items. When ration card or other public distribution system of States unable to tackle the issue, only Centre should step in, We expect atleastfew measures on the above lines, that is the dream of all.

M.S.Vaidyanathan, Chennai

I look forward to a budget that looks for its revenue from areas thathold immense potential and have not been effectively tapped in thepast for whatever reasons and provide relief to the salaried class.
It’s this class that has been worst hit by inflation. Spiraling costof essential commodities, be it vegetables or pulses have made lifemiserable. With their income virtually static on one hand andexpenditure mounting on the other, drawing up the monthly budget is anerve-wracking exercise for them. This budget I believe will providerelief commensurate with the prevailing cost of living for thesalaried class, to ensure they have the required disposable income totake care of their needs. I would like to see a quantum jump in thebasic exemption limit which should be raised to Rs.3 lakhs with a taxrate of 10% for theRs.3 lakhs to Rs.5 lakhs slab and 20% for income beyond Rs.5 lakhs.
Let the common man be spared as also the goods and services he consumes or uses.

Dilip K Raina, Ghaziabad

Relief to Salaried Masses.
In view of the untamed inflation and its adverse impact on the budgets of aam aadmi especially salaried class, it will bring cheer to such masses in case government provides some relief in the budget for the year 2011-12. There are adequate forums available for business community to correspond their genuine difficulties to the government for favorable consideration but for employees who depend on earnings through salaries/wages there is practically no mechanism in place to voice their concern. It will be highly appreciated in case finance ministry, considering the exorbitant rise in prices of essential requirements of daily life, provide some sort of relief in this year’s budget. The relief can be rolled back next year once the inflation is controlled. Such relief may be restricted only to those having a gross salary of up to say five/six lacs a year. Such a good gesture will not only ease aam aadmi financially but will also make him to feel that there is caring governance in the country. It may not be out of place to mention that perhaps monetary impact on the budget will not be bigger than an average financial scam reported recently. It is requested to kindly revisit charity section 80D, 80DD, 80DDB and 80U of the income tax Act. in view of the steep rise in the medical costs.
Dilip K Raina

K. V. Rao, Assistant General Manager (Retired), State Bank of India.

The current definition of Senior Citizens under the Income Tax Act is individuals aged 65 and above. Those who are in Government service (including public sector undertakings and banks) retire at 60 years. So the budget should aim at amending IT Act to bring down the age to 60 in conformity with the general retirement age.
Further, the interest earned on fixed deposits or even on savings parked in savings accounts attracts income tax if it exceeds Rs.10000. Considering the reduced value of rupee due to continuous inflation, this ceiling should at least be doubled. This would also achieve the objective of routing deposits through bank channels. Banks deposit growth is dwindling that would affect the credit-deposit ratio. At present the rural rich are averse to keeping their surplus in banks due to anxiety about deduction of tax at source. Banks can attract such deposits especially when they have been going in a big way for financial inclusion in rural areas.

Preetha Reddy, Managing Director, Apollo Hospitals Group

People define nations; they are the lifeblood of an economy and quite clearly a healthy ’Health Quotient’ can alone keep an economy surging ahead. Though this is seemingly obvious, healthcare or care for the health of India and its people has never been at the forefront.
The inception of Apollo Hospitals ignited a revolution. In pioneering corporate healthcare in India, this organization changed the rules of the game and set in motion the creation of a sector which is today touted as the fast growing, recession–proof sector of the Indian economy. Healthcare in India is predicted to be the next big boom, largely spurred by an increased corporate presence in the sector, recognition of India as a destination for medical value travel, outsourcing of global clinical trials, medical devices manufacturing and above all, an overarching cost advantage while matching and even surpassing global standards of quality and benchmarks.
India has a phenomenal Knowledge Quotient. Indian doctors are driving healthcare transformation across the developed world. A healthier infrastructure and an attitudinal shift with greater attention to healthcare will motivate these individuals to consider practicing in India, reversing the brain drain. Above all, it is important that we take cognizance of the clear link between health and economic growth as a 5-year gain in life expectancy leads to an increase of growth rate of 0.06 to 0.58% of the GDP.
The defining step would be the accordance of ‘National Priority Sector’ to Healthcare.
The primary obstacle hampering development of healthcare services has been the inadequate return on investments. According “National Priority Sector” status to healthcare will attract the capital required for development of physical infrastructure and development of educational institutions for medical, paramedical and allied academics. The status will create an attractive environment for domestic production of medical equipment, devices and consumables while also catalyzing research and development. India is poised on the door of superpowerdom. These imperatives will catalyse India’s economic development through healthcare and keep us fighting fit as a nation!

Dr. Prathap C Reddy, Chairman, Apollo Hospitals Group

India has made tremendous strides in several sectors that have propelled the country’s economy to levels never seen before. Despite a worldwide slowdown, India continued to surprise all. However, there is a great need for the health sector to accelerate and innovate to catch up with the healthcare needs of the country. Today, people in rural areas need greater attention and access to quality and timely healthcare since the existing facilities are inadequate the needs of the last person in the queue.
As we start a new decade I propose that it should be called the decade of inclusive health for all Indians where innovation and new healthcare technologies change the paradigm of health delivery at the rural and semi-rural level. Healthcare and hospitals are physical and social infrastructures and if the ambit was expanded to include infrastructure like Mobile Medical Units and ambulances, the last mile delivery of basic and ambulatory care would be greatly enhanced in rural India.
The National Knowledge Network (NKN) has plans to establish 100,000 nodes across the length and breadth of the country to bring together all stakeholders in Science, Technology, Higher Education, Research & Development and Governance on a common platform. Health must ride on this innovation as THIS IS THE SOLUTION, which is practical and doable if the nation has the will.
The need of the hour is to realize that healthcare is a necessary pre-requisite not only for economic development and progress, but also for skill development and creating employment for vast sections of our society. The potential that the health sector has to offer can add to the double digit GDP growth of the country and enable an India that is healthy and economically strong.