The Hindu : Andhra Pradesh News : Union Budget progressive, says CII

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Friday, Jul 09, 2004

Andhra Pradesh

Andhra Pradesh

Union Budget progressive, says CII

By Our Special Correspondent

HYDERABAD, JULY 8. The State unit of the Confederation of Indian Industry (CII) has termed the Union Budget, presented by Finance Minister, P. Chidambaram, as "progressive" and in line with previous budgets, reflecting a "continuity of reforms." The Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) said it was a "common man's Budget."

Addressing a press conference here on Thursday, the president of CII, Andhra Pradesh unit, Ramesh Datla, said the Budget was positive for industry in some aspects and silent on others. He welcomed the decisions on VAT and the Investment Commission, the increase in Foreign Direct Investment (FDI) limits in Telecom, Insurance and Civil Aviation sectors, higher rural credit outflow and commitment to infrastructure development. Investment in public sector undertakings was "negative," he said, adding that higher Government spending would lead to "inflationary trends." The director of Software Technology Park of India, Hyderabad, Vijay Kumar, said the Budget had maintained a "status quo" regarding Information Technology. The head of the CII panel on Power and Infrastructure, Harishchandra Prasad, welcomed Investment Commission and efforts to get higher FDIs. The excise duty on steel would have a negative impact on power project constructions, and the service tax and education cess would add to costs, he said. He said the power sector needed more sops. The Convenor of the Small Scale Industries (SSI) panel, D. N. Gauri, welcomed investment subsidies but said the Budget had not mentioned sick SSIs.

Addressing another press conference, the president of FAPCCI, O. P. Goenka, welcomed the integration of the goods and services taxes, the investment commission, abolition of long-term capital gains tax and the reduction of short-term rates, and the implementation of VAT. The focus on rural and social sectors would ensure equitable and sustainable growth, he said. He said the extension of regional concessions to North-Eastern States till 2007 was "unfortunate," adding that what was needed was the development of the region's wealth.

Mr. Goenka said he was disappointed that not much was said on Small and Medium Enterprises. Both he and FAPCCI's senior vice-president, Sudhir Sanghi, said the exemption from CENVAT would boost powerlooms and handlooms. These sectors would be revived and would grow rapidly, he said. The president of Andhra Pradesh Federation of Chambers of Commerce and Trade (APFCCT), Soma Dayanand, said it was "poor man's budget."

The Chairman of the AP chapter of the All-India Manufacturers Organisation (AIMO), G. Jayaraman, said compulsions of coalition politics had left their mark on the Budget, which sent "mixed signals" to the manufacturing sector. The tax on steel would be inflationary, and it was unlikely that the industry would grow by 10 per cent as envisaged, he said.

The Andhra Pradesh Federation of Textile Associations opposed the implementation of VAT, saying the trading community would be hurt and businesses might close down.

The vice-president of the Bharatiya Mazdoor Sangh, AP, R. V. Subba Rao, said enhancement of FDI limits was disappointing. The former head of Indian Institute of Economics, V. K. Srinivasan, welcomed the creation of a Board for Reconstruction of PSEs and the Backward States Grant Fund.

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