The Institute of Company Secretaries of India welcomes sustainable growth oriented Union Budget 2011-12
Budget reflects financial translation of the policy initiatives of the government towards inclusive growth.
The Institute of Company Secretaries of India welcomes the Budget for the year 2011-12 placed before the Parliament by Shri Pranab Mukherjee, Hon™ble Finance Minister of India. The budget is inclusive growth oriented and broad based and focuses on priority social sector, agriculture, infrastructure, education and financial sector. Institutional initiatives to deal with corruption and black money proposed in the budget would go a long way in providing clean administration and effective governance.
The announcement by Hon™ble Finance Minister that the Companies Bill will be placed in the current session of the Parliament is a long awaited development which the professionals have been looking forward to. It will go a long way in providing new growth oriented company legislation in the country.
Providing desired impetus to the infrastructure sector by taking a number of measures towards its growth and development will help achieve the target growth rate of 9% in the next fiscal. The proposed comprehensive policy would further help in developing public private partnerships for sustainable growth of infrastructure sector.
The black money has remained a critical issue in the development agenda of the country. The institutionalization of anti black money systems by adopting five fold strategy such as joining the global crusade against black money; creating appropriate legal framework; setting up of institutions for dealing with illicit funds; developing systems for implementation by announcing comprehensive national policy in this regard and the capacity building of manpower for effective action will enable the government to bring illicit funds into the mainstream of development and constructive use.
Similarly, the setting up of Group of Ministers to deal with the ever increasing menace of corruption would lead to better administration and governance.
The budget not only spared the common man from extra tax burden but enabled individuals and senior citizen tax payers to benefit from the increased exemption limit and by lowering of age limit from 65 years to 60 years for availing of tax benefits available to senior citizens. Further, 15% tax on dividend received from foreign subsidiaries will encourage the Indian companies to repatriate dividend instead of investing it outside. However, imposition of Alternate Minimum Tax on Limited Liability Partnerships at such a nascent stage of their growth may discourage the new entrepreneurs from adopting this form of organization. Self assessment provisions in the Customs Act is a significant step towards simplification.
The measures taken to attract foreign investment by allowing mutual funds to accept subscriptions from foreign investors who meet KYC requirements for equity schemes, enhancing FII limit for investment in corporate bonds of companies in infrastructure sector and unlisted bonds with a minimum lock in period of three years would widen the class of foreign investors in Indian market. Similarly, the budgeted target of raising of Rs. 40,000 crore by way of divestment in the Central Public Sector Enterprises would bring further vibrancy in the capital market.
Initiating legislative reforms in the financial sector would help in providing adequate regulatory framework.
Government needs to reconcile ecological concerns with developmental agenda. The Group of Ministers set up to consider the environmental concerns, should also involve stakeholders either by having stakeholder representation on the group or through stakeholder engagement. Further, the budget allocation for ten year Green India Mission, launching of environmental remediation programmes etc. is a step in the right direction and it is expected that these initiatives will be encouraged further.
Pursuant to the recommendations of Second Administrative Reforms Commission, the Government has set up a Performance Monitoring and Evaluation System (PMES) to assess the effectiveness of Government departments in their mandated functions. While this is a welcome move, financial allocation for each of the objectives and its utilization at the end of the financial year also needs to be reflected in the evaluation.
