The non-resident Indian business community in the Gulf region were positive about the proposals in the Union Budget for rural and agriculture development, but expressed disappointment that non-resident Indian interest income in India would be taxed.
"The Budget is growth-oriented and will help lower poverty because of its thrust on agriculture and rural development but the move to tax NRI interest income was a blow to overseas Indians," said Ismail Hukkawalah, president, Indian Business and Professional Council.
"The move will not only plug flow of funds from abroad to India but NRIs may also move their funds out of India," he said.
"Of course because of the strong foreign exchange position, the government may not mind that now. But for NRIs who have stood by their country in hours of crisis, it is a major blow," he said.
Businessman Syed Khalil said the Budget inspired confidence, which was also reflected in the stock market. He said the focus on rural areas, backward states and agriculture was overdue.
Businessman Ram Buxani echoed those feelings, saying he liked the attention given to the rural sector and education. He felt the new cess on corporate firms that will be used for education could eradicate illiteracy.
But he hoped the government would not go ahead with the move to tax NRIs.
Kamal Vachani, director, Al Maya Group and the regional representative of the Electronic and Software Council, welcomed the full excise exemption on computers. But he felt the move to tax NRI deposits would discourage the flow of funds to India.
K V Shamsudheen, director, Barjeel Securities, said the proposal to continue to exempt equity-related mutual funds from dividend tax would benefit the stock market.
He said the provision for drinking water, education and healthcare for the poor, the allocation of Rs 30,000 crore (Rs 300 billion) for water-related projects and the assistance that would be provided to scheduled caste/scheduled tribe farmers to start a massive nationwide water-harvesting scheme would all have a salubrious effect on poverty eradication, essential for a strong nation.
But he also felt the tax on NRI funds could have been avoided, given that NRIs had always helped the mother country out at critical times.
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