The Hindu : Chambers hail interim budget

Online edition of India's National Newspaper
Wednesday, Feb 04, 2004

Andhra Pradesh

Andhra Pradesh

Chambers hail interim budget

By Our Special Correspondent

HYDERABAD, FEB. 3. The Andhra Pradesh chapter of the Confederation of Indian Industry (CII) feels that the interim budget is a "watershed" for the Indian economy and going by the falling fiscal deficit it sees India a being well set on its path of economic growth and fiscal consolidation.

In a press release issued here on Tuesday, K. Satish Reddy, Chairman of CII, AP, said "We will now see the benefits of a truly virtuous economic cycle-of higher growth, higher expenditure on infrastructure, greater revenue buoyancy and steadily falling fiscal deficits.''

The most heartening aspect of the budget was the news on the fiscal and revenue deficit fronts. We had expected a fiscal deficit to come down from 5.6 per cent to around 5.2 per cent To see it drop to 4.8 per cent is a bonanza. The interim exercise has also furthered the cause of reforms through specific measures, he said.

These include the packages to revitalise the tea and sugar industries, benefits for power projects, three-year exemption for equities from long- term capital gains, reduction in stamp duty on all Central Government stamp papers, and the proposal to introduce tonnage tax scheme for shipping industry, he said.

In its reaction, the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) felt that the Union Finance Minister, Jaswant Singh had kept to the basic theme of "feel-good factor" of projecting a stable economy, assured growth and enhanced national prosperity, while presenting the interim budget.

In a statement, S.S.R. Koteswara Rao, president of FAPCCI, said extension of Antyodaya Anna Yojana scheme to cover 2 crore families and focus on the farming sector would help families below the poverty line. The Finance Minister's request to banks to further bring down interest rate on crop loans would help small and medium farmers.

Increasing credit to small and medium enterprise borrowers from Rs.2 lakhs to Rs. 10 lakhs would give a boost to this segment. The Agricultural Infrastructure and Credit Fund, Small and Medium Enterprise Fund and the Industrial Infrastructure Fund, to be made operational shortly, would have a highly beneficial impact on the respective segments.

The assurance given to the BPO sector that subject to certain safeguards no income tax would be levied on service which are ancillary and auxiliary in nature will put to rest apprehensions in this sector. A further three-year exemption given to listed equities from capital gains tax would have a positive impact on the stock market, he felt.

Excellent, says BJP

State BJP leaders hailed the interim budget as `excellent' and said that it would accelerate economic growth, besides leading to second green revolution.

Addressing a press conference here, the BJP's spokespersons, S.V.Seshagiri Rao and K.Laxman, said that it offered several concessions to farmers and others.

Refuting the Congress charge that it was an `election budget,' they said that it would increase the foreign investment flow into the country and further improve the economy.

The State BJP president, N. Indrasena Reddy, described it as a `pro-poor' and `pro-middle class' budget.

Disappointing: TRS

The Telangana Rashtra Samithi (TRS) said that the concessions announced in the interim budget were with an "eye on the elections and not out of love for the people."

In a statement here, D. Chinnamalaiah, and three other TRS leaders said that the staggering fiscal deficit of Rs. 1,35,000 crores was an indication that there would heavy taxation in the regular budget.

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Andhra Pradesh