Rings in optimism: Infosys

TV Mohandas Pai, Member of the Board, HR, Infosys Technologies

Economic growth has averaged 8.8 per cent in the last four years. Tax revenues have been extremely buoyant and this has allowed the finance minister to make significant investments in the agriculture, education and social sectors. The FM has also increased allocations for the public sector and allocations for infrastructure sector, particularly the road network. This is a welcome move for the country. We have also seen an increase in the allocation for the railways in the Railway Budget. So, overall investment into infrastructure is expected to substantially increase in the next fiscal year. The area of indirect taxes required some serious attention. And the FM has indeed been bold on this front. He has reduced the overall tax rate from 16 per cent to 14 per cent. One would have expected it to have been further reduced to 12 per cent, besides bringing down the taxes on goods which are currently very high – between 20-25 per cent. Having said that, the FM has taken steps for the tax rates on certain goods like two-wheelers, small cars to be brought down to 12 per cent. These are steps in the right direction and will boost general demand and reduce the cost of goods for the average Indian. The stage has now been set for tax reforms with the GST being promised, the CST coming down to 2 per cent, and overall one feels positive about the economy and we could give the FM 9 out of 10 for a great Budget. He has indeed made five Budgets that have significantly changed the face of the Indian economy. In the area of tax reforms, the FM has been indeed very generous. One could get generous if tax collection remains buoyant and one collects more than what one budgets. For the individual taxpayer, there is much to cheer. Tax slabs have been revised upwards. People earning up to Rs 5 lakh would have to pay a tax of Rs 99,000 a year earlier and now they will pay only Rs 55,000. The "missing middle" has finally been addressed. Those in the Rs 2 lakh to Rs 5 lakh tax slabs were efficient in compliance and now, with the lower tax burden, this will be of tremendous help to that class. The middle class can now rejoice. Overall, the Budget rings in a note of optimism for the Indian economy and the FM seems to have signaled the arrival of buoyant times ahead.