India Inc gives a thumbs down to Budget '07

Mumbai, Feb 28 (UNI) India Inc today gave a thumbs-down to the Union Budget 2007-08 and termed it as 'populist and extremely market-unfriendly'.

FICCI President Habil Khorakiwala said a wrong signal has gone out to the corporate world, as the government has increased cess and dividend distribution tax.

''The market had a bumpy ride on the day of the Budget. Lack of inflows at higher levels, high valuations, inflation and rising interest rates, fears of an earnings slowdown in coming quarters, and profit taking at higher levels returned to haunt the market.

From an all-time high of 14,723.88 struck on 9 February 2007, the BSE Sensex had already tumbled 1,245 points, to 13,478.83 by 27 February 2007, a day before the Budget. The defeat of the Congress in Uttarakhand and Punjab made matters worse,'' he observed.

''This Budget is disappointing. There are no steps taken to increase productivity in agriculture, electricity and other sectors, which are not performing to their full potential,'' CII President R Sesashayee lamented.

He opined that since revenues from peak customs and excise were increasing, this could have been a time to reduce excise duty to 20 per cent, if not 15 per cent overall, which would have been in line with the Kelkar Committee Report.

UNI