Budget is pragmatic, realistic: Infy CFO

MUMBAI, INDIA: According to V Balakrishnan, Infosys Limited's CFO the fiscal budget for 2012-13 looks like a very pragmatic and realistic one.

“Looking at the current global uncertain economic environment, the budget looks like a very pragmatic and realistic one. The approach to the budget is very clear — focus on more inclusive growth, invest more in infrastructure, create mechanism to give financial support to some of the ailing sectors of the economy, expand the tax base, bring efficiency in subsidy spending and focus on transparency by taking some steps to arrest the black money,” Balakrishnan says.

“Overall, no big bang reforms or changes but maintaining the status quo, provides some hope to sail through the difficult year,” he adds. 

According to him, the move towards a “Medium-term Expenditure Framework” statement which will set forth a three year rolling target for expenditure indicators is a very good sign.

In his view, the focus on targeting subsidies to the needy through direct transfer of subsidy is also a positive move and also the focus on controlling the subsidy bill under 2% of GDP for 2012-13 and at 1.75% in the future years will give comfort to watchdogs who were worried about the subsidy bill of the Government going out of control.

Further he observes, the focus on infrastructure, health and education is a step in the right direction.

“The move towards increasing the tax base for service tax and increasing the service tax and Excise duty is understandable looking at the need to increase the tax revenues for the Government. It is; however, disappointing to see that no clear timelines had been specified on implementing some of the big ticket reforms like GST, DTC and FDI on Multi-brand retail. It clearly shows that political consensus is lacking on these big ticket reforms,” Balakrishnan states.

Moreover he says, the focus on bringing transparency in Public procurement will result in increased spending on IT by the Government. The industry had not expected any big change in the tax regime.

However, the industry requested some clarity and certainty on the application of tax laws. Hopefully, the government will provide the necessary clarity through administrative circulars to bring in greater certainty on tax position for the industry, he opines.

“Overall, it is a well-balanced, pragmatic and realistic budget,” Balakrishnan concludes.