Reaction of Yogesh Dhingra, Finance-Director & COO, Blue Dart Express on Union Budget 2010-11
We welcome the Union Budget for 2010-11 as a balanced budget which aims to maintain growth as well as contain the fiscal deficit. Fiscal deficit of 6.9% is lower than what the industry was expecting and therefore its good news for the economy and reflects the fiscal discipline of the Government.
However the hike in duties on petroleum products along with an increase in central excise duty on petrol and diesel could translate into a price increase of approx. Rs. 2 to Rs. 3 per litre. And if this additional price burden gets passed on to the consumers we could see a general price increase across all goods.
In fact we were looking forward to ATF being announced as a “declared goods” to support the ailing aviation sector.
Both the above, on petroleum products are negative for the transportation and logistics sector.
The increase of slab rates for personal income taxes, will give a higher disposable income in the hands of the individual which would spur consumption and give a fillip to the economy and to the logistics sector for transportation and distribution.
The FM could have been more generous to corporate by scrapping the surcharge completely instead of a 2.5% reduction only. However, we are disappointed on the hike in minimum alternate tax (MAT) from 15 per cent to 18 per cent. This is going to create a further strain on liquidity in the aviation sector.
The calibrated roll back of stimulus measures are also welcome and are happy that the service tax rate remains untouched at 10%.
We are also happy with the FM’s announcement of a definitive time frame for implementing the GST i.e. by April 2011.
It is also very heartening to see the continuing investment to strengthen the infrastructure as, allocation for road transport increased by over 13 per cent from Rs. 17,520 crore to Rs 19,894 crore.
RBI considering giving additional banking licenses to private sector players will give a boost to our documents’ business.