The Hindu Business Line : MF industry hails Budget

"From the Mutual Fund industry's perspective, the fact that dividend tax regime hasn't been changed, is a positive. Continuity has its advantages and I am sure that as an industry we will benefit from it.

The announcements, regarding a gold-based fund is positive, as it opens up another large market segment for the industry. However, my feeling is that the ETF format may prove to be too restrictive, given the potential size of the market.

In general, one gets a positive feel from the Budget and I am confident that the measures announced with regard to taxation and reforms will prove to be beneficial for the economy."

Mr Rajiv Shastri, CEO, Sahara Mutual Fund

"THE Budget strikes a balance between economic growth and social objectives laid down by NCMP. With a target to achieve growth of 7-8 per cent in GDP, the use of foreign exchange in infrastructure investment, emphasis on agriculture & rural infrastructure and efforts to create a more enabling environment for the banking sector is very progressive. Rationalisation of customs and excise duties, the drop in corporate tax rates, simplification of personal taxation, and implementation of VAT are important steps in creating a modern tax regime.

Also, the introduction of gold traded exchange funds is a positive step in introducing new investment products for the retail investors.

Overall, the Budget has maintained continuity of policy in key areas, has tried to simplify tax laws and attempts to provide an enabling environment for achieving a higher growth rate."

Mr Milind Barve, MD, HDFC Mutual Fund

"The Union Budget is very positive for capital markets. The Finance Minister has addressed the three key challenges - prudent fiscal management, increasing infrastructure investment and Bharat Nirman - by focusing on both urban renewal and rural development. The Budget also holds the promise of pragmatically addressing the need to increase FDI in sectors needing huge investments.

The reduction in corporate tax rates is very positive, and will lead to a re-rating of profitable companies. The focus on employment generation, the thrust on rural irrigation, electrification and housing, and incentives for modernisation in the textile and sugar sectors all have huge multipliers for the national economy.

For mutual funds, the removal of Section 88 and 80L benefits and the Rs 1 lakh `saving' in tax credit are positives. Savers will be able to look at investment options without the constraints of tax rebates.

Also, Gold-linked mutual funds will enable funds to tap into the world's biggest gold market."

Ajay Bagga, CEO, Kotak Mahindra Mutual Fund

"There are many positives for the capital markets, the most important being the commitment to develop the corporate debt markets. What stands out in the Budget is the Finance Minister's progressives moves towards rationalisation of the tax structure in both direct and indirect taxes, widening the tax base and simplification of processes for tax administration. These changes should result in greater tax compliance and an increase in disposable incomes on an aggregate level and spur consumption spending by consumers.

Rationalisation of personal income tax slabs along with scrapping the deductions under Sections 88 and 80L, and bringing all deductions under one overall ceiling of the new Section 80C with Rs 1 lakh limit is a significant step forward. These measures will bring in long-term money into the capital market with a greater participation by domestic retail investors as well."

A.K.Sridhar, Chief Investment Officer, UTI Mutual Fund

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