Tax exemption can lift consumption: Kamath
Mr Kamath is also of the opinion that market slide was only an initial reaction and not a true indication of foreign investor sentiments vis-à-vis the Indian markets.
KV Kamath, chairman, ICICI Bank, views the Budget as supportive of growth. He feels that the FM���s announcements regarding large investments in infrastructure, both in rural and urban areas, will create employment in infrastructure and related sectors. Mr Kamath is also of the opinion that today���s market slide was only an initial reaction and not a true indication of foreign investor sentiments vis-��-vis the Indian markets.
Do you think foreign investors could be put off by the absence of any reference to big-ticket reforms?
The market reaction as of now appears to be signalling that some expectations have not been met. But I believe that as the initial reaction subsides, investors would continue to put money to work in India given our strong growth prospects and the supportive steps taken by the Budget.
Do you think the relaxation in personal income tax would lead to a higher disposable income leading to higher consumption?
Yes, I think the fact that the Budget has given some relief on personal income tax is positive for consumer sentiment and should help in reviving consumption.
Do you feel that infrastructure financing will emerge as a bankable option now?
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The government has made a clear statement of intent of its focus on infrastructure development through its various budgetary allocations. Actual development and implementation of projects will now have to take place through the public-private partnership (PPP) model. The refinance facility through IIFCL is now meaningful enough to play a key role in financing of infrastructure projects.The promise to infuse funds in PSU banks and insurance companies could turn out to be a strain on the exchequer. Your comments.
The finance minister has stated that majority state ownership in public sector enterprises will be maintained while increasing public participation in these enterprises. So, I would think that further capital raising by government-owned banks and insurance companies would be a mix of government and public investment; the government would also realise gains from greater public participation in other PSUs. The impact on the exchequer will have to be looked at in the totality of the fiscal deficit and its financing.
Will the Budget create jobs and aid recovery?
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The Budget is supportive of growth and large investments in infrastructure, both in rural and urban areas, will create employment in infrastructure and related sectors.How do you think corporate India will react on the proposal of election funding?
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Each corporate would look at this based on its priorities for different types of expenditure. The 100% tax deduction for donations to electoral trusts would, of course, act as a financial incentive, as it would reduce the overall expense burden on account of making electoral funding contributions.Download
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