Bangalore: The Bangalore Chamber of Industry and Commerce (BCIC) has said the Union Budget is on "expected lines" for the industry and will send "positive signals" to foreign investors by fashioning a stable tax regime. The budget, on the whole, has maintained status quo but could have done more to sustain the country's long-term growth prospects, it has said.

Responding to the budget proposals, BCIC President Anant Koppar said the increase in service tax from 10 per cent to 12 per cent will have a major impact especially on the information technology and export-oriented industries as they will not be able to claim setoff in the absence of taxable output services. Another disappointment is the absence of a road map to reduce the Central sales tax from 4 per cent to 2 per cent.

BCIC, however, welcomed specific proposals that will benefit the textile, auto, food and aerated drinks, steel and semiconductor manufacturers, to name a few.

On the infrastructure front, the announcement of seven ultra mega power projects, especially the Karnataka project to come up in the coastal region, is welcome. The proposed Bangalore-Chennai highway will accelerate industrialisation.

ABB India Vice-Chairman and Managing Director Ravi Uppal said initiatives on cluster development and high-tech industry are welcome steps.

Chet Kamat, Managing Partner, India Delivery Center Network, Accenture, said measures being initiated for reduction of fiscal deficit are welcome. Alok Misra, Chief Financial Officer, Mphasis, termed it a retrograde budget for the software industry as the cost of both hardware and software, which are business enablers, will increase in the domestic market.

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