Budget 2007 some thoughts

“What a damp squib!” is the most heard line since yesterday’s announcement of the Union Budget.

Personally I feel, the budget was as apolitical as it can get and that is commendable considering this being the election year. What FM did was more or less expected. It did not give anything to the stock market, neither did it take anything away from it – the indices have been rising for a while and the sudden fall can be attributed to technical corrections which would have happened with or without a reason. In-fact, one can already see an upswing happening today.

The budget was agriculture and tourism friendly, but hard on IT industry with implication of MAT of 11.33%. However the MAT affects only those companies who have been enjoying a tax holiday so far and were hoping to enjoy it for one more year. For a company like SANIsoft which got minimmal sops of being an IT company (for various reasons), getting all IT companies to pay tax makes it a level playing field. However, a small hike in outsourcing costs can not be ruled out.

On the employee front, things could have been worse, and FBT on ESOPs was coming anyways. Companies and Coporates never suffer, so the burden of FBT is going to be passed on to the employees, affecting their net income.

On the negative side, a Rs 1000 relief to is in fact going to cost more to the assesses considering the 1% hike in education cess. Real Estate is going to be hit with hike in cement prices as even they are going to pass their burden of excess excise duty to the consumers. However, these are some things that a growing economy has to bear as cost of growth. Indian Economy has never been better and the country can take some mature financial planning in its stride.

3 thoughts on “Budget 2007 some thoughts”

  1. passed on to the employees, affecting their net income.
    Well lady, that does affect the company too… it motivates the employees to escape to greener pastures ASAP.

    though the cost of living in the greener pastures would leave them more poor than their currents lives with lesser salary.

    1. Indeed. And look at the larger picture – employees leave and new employees join – the company goes on, ultimately its the job hopper that pays a price 🙂

      Would like if you identify yourself, I hate talking to nameless/faceless people.

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