Sujit Sircar, CFO, iGATE

The Finance Minister clearly showed the government's commitment towards growth, especially in the rural sector and infrastructure development. In an economy, where 70% of the population belongs to the rural segment, support to that sector clearly shows the intention of the government for an all inclusive growth.

The fiscal deficit of 6.8% definitely looks high. More concerning is that there is no mention of when the trend might see a reversal. Clearly, the most dampening fact of the budget is the non-directional posture on the governmental disinvestment policy and policy towards foreign institutional investor (FII) investment.

From the IT industry perspective, this budget has been good, considering the boost FM has given in the form of extension on the 10A/B scheme and also on the abolition of fringe benefit tax (FBT). The Finance Minister has also commented on the simplification of service tax exemption for exporters, clearly a major pain point in the current context.

Though the FM has given an extension of utilisation of minimum alternate tax (MAT) credit from 7 to 10 years, considering the increase of the rate 10% to 15%, there will be a significant strain on the cash flow for IT companies. Lastly, some investment on the educational sector will ensure smooth supply of knowledge workers for the industry.

On the personal front, the surcharge removal will give additional income in the hands of individuals which might increase domestic consumption.

Overall, I would say it is a good budget under current recessionary condition, where the focus is on increasing expenditure and generating demand.