We are today living in several negative conditions and the report card is not looking good at all.

GDP has had a significant fall of 1.2 per cent from the last fiscal and growth per cent in services sector declined by 1.5 per cent. Rupee has been volatile than ever against the US dollar and the fear of another impending recession is looming large on developed economies.

With all these, I was hoping that the Finance Minister will make some visible changes through this Budget. On certain grounds, the Government has done itself good by containing the fiscal deficit at 5.2 per cent of GDP and increasing the tax GDP ratio to 10.7 per cent. Growth in corporate taxes and personal income taxes is again good for the state exchequer. However, my sense is that, things will not change if you keep the system in status quo.

This will only breed inertia in the structure, than any growth. By continuing the existing policies and measures, and introducing welfare instruments for students and women, the Minister seems to only insulate the Government from the impending elections than show any mood of aggression to tackle the challenges head on.

Pinching the rich to pay more, while it looks justified, is a continuation of the socialistic trend seen in other countries. The tax rebate given to individuals looks symbolic for a selective class of middle-income groups than anything else.

From a corporate standpoint too, it has not done anything imaginative and has been a dampener of sorts. With no sops for the industries and an increased surcharge, there is nothing sparkling for the corporate sector to look forward to.

For the IT industry, it is going to be business-as-usual without getting anything good out of this Budget. It would have been good to see if some of our wish-list clarifications could have been addressed such as double taxation for software and simplification of refund procedures for service tax. Also, there has not been any restoration of MAT exemption for SEZ units.

Overall, in the wake of the current situation, it has been a very conservative budget with a defensive mood. At the end of the day, we continue to live in the hope that we had before the Budget, for a better growth rate, GDP and reined inflation. It will be interesting to see the economy back on track with the Government treading the middle path.

(The author is CEO of iGATE)

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