TOTAL CONCENTRATION: Members of the Karnatak Chamber of Commerce and Industry watching the live telecast of Union Finance Minister P. Chidambaram presenting the Budget, in Hubli on Tuesday.

HUBLI: The Union Budget presented by Union Finance Minister P. Chidambaram on Tuesday has been welcomed by many here.

People appeared to be happy with the Budget as it did not include any proposal to increase the prices of petroleum products. Also, Mr. Chidambaram's decision not to tinker with the income tax rates has left the salaried class happy.

Many people that this Correspondent spoke to were relieved to find out that they will not have to pay more for petrol.

Businessmen, merchants and service providers were upset as the sales tax net has been widened and the rate has been increased to 12 per cent.

Shankaranna Munavalli, president, Karnataka Chamber of Commerce and Industry, termed the Budget as "good" but was against levying of income tax on the profits made by cooperative banks. Many cooperative banks are already in the red and levying income tax on their profits will sound the death knell for them, he opined.

He said the chamber will take up the issue in association with other organisations and urge the Finance Minister to withdraw the move. He hoped that the reduction in excise duty on man-made yarn from 16 per cent to 8 per cent and the reduction on import duty on cotton will strengthen the cotton industry.

Mr. Munavalli termed the restructuring of Section 80 (G) pertaining to donations to institutions as a "bolt from the blue." This, he said, will discourage donors and philanthropists.

Boost to core sectors

Commenting on the Budget, N.A. Charantimath, chartered accountant and a member of the Managing Committee of the KCCI, said the core sectors of the economy such as the manufacturing, infrastructure development, banking, capital market, urban development and social sectors have got a boost.

But the "darker side" of the Budget are the increase in service tax by 2 per cent, the continuation of the fringe benefit tax, no major concessions for cottage industries and no major policy for the growth of agricultural sector, he said.

Despite these factors, the Budget is growth-oriented, he observed.

Comprehensive

B.S. Surendra, chairman, Karnataka Vikas Grameen Bank, termed the Budget comprehensive and aimed at the development of the country.

In a release issued here, he said the Budget provides for Rs. 11,400 crores for rural employment generation and Rs. 18,696 crores under the Bharat Nirman project.

This will have a direct bearing on rural banking, Mr. Surendra said.

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