The Hindu : Industry hails budget, farmers disappointed

Online edition of India's National Newspaper
Friday, Feb 13, 2004

Tamil Nadu

Tamil Nadu

Industry hails budget, farmers disappointed

By Our Special Correspondent

COIMBATORE, FEB. 12. The budget presented by the Finance Minister, C. Ponnaiyan, in the Assembly yesterday has evoked mixed reaction. While the plantation sector, small-scale units, textile exporters, the Confederation of Indian Industry and the Chamber of Industry and Commerce have hailed it farmers expressed disappointment.

The United Planters' Association of Southern India (UPASI) and the Planters' Association of Tamil Nadu (PAT) have expressed their gratitude to the Chief Minister, Jayalalithaa, for abolishing Agricultural Income Tax. " No time could have been more opportune than now for announcing this measure when the plantation industry, especially tea and coffee, is reeling under crisis", said B.P. Medaiah, UPASI president. He wanted the sales tax on tea reduced from eight to four per cent. If not possible, a two-stage taxation could be introduced on the lines of Assam and West Bengal, levying two per cent at the first stage and six per cent resale tax at the second stage for sales within the State. The Central Sale Tax could be reduced from four to two per cent.

D. Hegade, PAT chairman, said abolition of Agricultural Income Tax "should help recreate confidence in the investors about the future of the industry and prevent flight of capital".

The Tirupur Exporters' Association commended the budget as "bold and farsighted". Its president, A. Sakthivel, thanked the Chief Minister for finding an amicable solution to the vexatious sales tax problems confronted by manufacturers of hosiery products and knitwear for domestic consumption.

IT park

The president of the Coimbatore District Small Industries Association, Tee. Narayanaswami, welcoming various proposals, including the new industrial policy for small sector, pleaded for expeditious action to set up an Information Technology park here. Commending the reduction of the tax rate on pollution control equipment, he said: "The reduction in penal rate of interest for belated sales tax payment is a welcome move. But, it should be reduced further and kept at the lowest level of half a per cent per month".

The Indian Chamber of Commerce and Industry here hailed the Chief Minister's "bold and visionary development agenda" focussing on economic turn-around, particularly for the development of IT and IT-enabled services investments in Coimbatore. Its president, A. Sakthivel, said the budget would certainly improve the economy and ensure a comprehensive development of the State.

The Coimbatore chapter of the Confederation of Indian Industry welcomed the budget's emphasis on development of small and medium enterprises (SME), information technology and tourism. It also commended the initiatives regarding business deregulation, establishment of technology development centre to assist the SME sector and Knowledge Industry Township

However, the State president of the Tamilaga Vivasayigal Sangham, M.R. Sivasamy, termed the budget "disappointing". There was nothing in it for farmers suffering from five years of successive drought except land tax waiver of Rs. 60 crores. He alleged that drought-relief works taken up in the past two years benefited only middlemen. The farmers should be directly paid some amount from the drought relief allocation for current year after spending on drinking water schemes. Loans should be written off for all farmers, irrespective of their category.

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