“Budget reflects financial translation of the policy
initiatives of the government towards inclusive growth.”
The
Institute of Company Secretaries of India welcomes the Budget for the year
2011-12 placed before the Parliament by Shri Pranab Mukherjee, Hon’ble Finance
Minister of India
The
announcement by Hon’ble Finance Minister that the Companies Bill will be placed
in the current session of the Parliament is a long awaited development which
the professionals have been looking forward to. It will go a long way in
providing new growth oriented company legislation in the country.
Providing
desired impetus to the infrastructure sector by taking a number of measures
towards its growth and development will help achieve the target growth rate of
9% in the next fiscal. The proposed comprehensive policy would further help in
developing public private partnerships for sustainable growth of infrastructure
sector.
The
black money has remained a critical issue in the development agenda of the
country. The institutionalization of anti black money systems by adopting five
fold strategy such as joining the global crusade against black money; creating
appropriate legal framework; setting up of institutions for dealing with
illicit funds; developing systems for implementation by announcing
comprehensive national policy in this regard and the capacity building of
manpower for effective action will enable the government to bring illicit funds
into the mainstream of development and constructive use.
Similarly,
the setting up of Group of Ministers to deal with the ever increasing menace of
corruption would lead to better administration and governance.
The
budget not only spared the common man from extra tax burden but enabled
individuals and senior citizen tax payers to benefit from the increased
exemption limit and by lowering of age limit from 65 years to 60 years for
availing of tax benefits available to senior citizens. Further, 15% tax on
dividend received from foreign subsidiaries will encourage the Indian companies
to repatriate dividend instead of investing it outside. However, imposition of
Alternate Minimum Tax on Limited Liability Partnerships at such a nascent stage
of their growth may discourage the new entrepreneurs from adopting this form of
organization. Self assessment provisions in the Customs Act is a significant
step towards simplification.
The
measures taken to attract foreign investment by allowing mutual funds to accept
subscriptions from foreign investors who meet KYC requirements for equity
schemes, enhancing FII limit for investment in corporate bonds of companies in
infrastructure sector and unlisted bonds with a minimum lock in period of three
years would widen the class of foreign investors in Indian market. Similarly,
the budgeted target of raising of Rs. 40,000 crore by way of divestment in the
Central Public Sector Enterprises would bring further vibrancy in the capital market.
Initiating
legislative reforms in the financial sector would help in providing adequate
regulatory framework.
Government
needs to reconcile ecological concerns with developmental agenda. The Group of
Ministers set up to consider the environmental concerns, should also involve
stakeholders either by having stakeholder representation on the group or
through stakeholder engagement. Further, the budget allocation for ten year
Green India Mission, launching of environmental remediation programmes etc. is
a step in the right direction and it is expected that these initiatives will be
encouraged further.
Pursuant to the recommendations of Second Administrative
Reforms Commission, the Government has set up a Performance Monitoring and
Evaluation System (PMES) to assess the effectiveness of Government departments
in their mandated functions. While this is a welcome move, financial allocation
for each of the objectives and its utilization at the end of the financial year
also needs to be reflected in the evaluation.
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