It's a Budget that spurs growth and encourages almost every sector of the economy. Continuation of fiscal relief under Sections 10A and10B for the technology sector is a welcome step that will help the industry.
Domestic mergers and acquisitions activity in the information technology sector has been encouraged by allowing tax benefits to continue even in case of dominant change in ownership of software companies, which was not the case earlier.
Lowering indirect taxes is likely to propel consumer demand leading to increased industrial activity. The stimuli to infrastructure and healthcare sectors are expected to have a cascading effect on the economy.
In fact, this is a measure that was long overdue. Allowing private sector to build airports is also a forward looking measure. This will help business and tourism. The strong emphasis on procedural and administrative reforms certainly makes life easier for the tax payer.
The level of fiscal deficit is a cause for concern, and unless reined in it might lead to inflationary pressures. While doing away with long-term capital gains tax on equities is commendable, reintroduction of dividend distribution tax for corporates at a higher rate is disappointing.
The author is chairman, Satyam Computers Ltd.
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