Karl Slym, President and Managing Director , General Motors India

The budget is encouraging due to its focus on infrastructure, education, agriculture, irrigation, health care and social security schemes. Since it addresses some of the concerns of the industry in general, it should help fuel demand and economic growth going forward.

As far as the automotive industry is concerned, the budget did not fully meet the expectations as the sector continues to remain sluggish. Besides a marginal reduction of Rs.5,000 of the additional cess on bigger cars attracting Rs.20,000 over and above the 20% excise duty, there is nothing on the excise front for the car sector. We were also expecting the excise duty of said categories of vehicles to be brought down to the CENVAT level. The automotive industry is one of the growth drivers of the economy and as such some tax relief would have helped the industry to generate some volumes.

Having said this, government’s intention to introduce GST with effect from April 1 2010 and reduce the CST by 1% are welcome decisions. Removal of FBT and commodity transaction tax is also welcome decisions.

Some of the other announcements made by the finance minister for manufacturing and R&D activities should enhance the competitiveness of Indian industry. The intention to further promote the development of infrastructure, particularly in rural areas, is a positive step. The government’s commitment to continue with its reform process is likewise positive. These proposals, if implemented effectively, should have a positive impact on industry and the economy as a whole. The challenge now is the implementation of the proposals and schemes announced in the budget. Our hope is that the market will respond favorably.