The Hindu : Business : Industry greets fiscal proposals

Online edition of India's National Newspaper
Wednesday, Mar 01, 2006

Business

Business

Industry greets fiscal proposals

Special Correspondent

`A continuation of growth oriented measures without major negatives'

— Photo: PTI

COMES FOR PRAISE: Industrialists watch presentation of Union Budget for 2006-07 on screen at a programme organised by FICCI in New Delhi on Tuesday.

NEW DELHI: India Inc generally hailed the Union Budget 2006-07 as one with `no major negatives' and complimented Finance Minister P. Chidambaram for measures to bring in fiscal discipline and cut deficit. However, it expressed a mixed view on the new tax proposals, burdening the capital market.

While the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) saw the budget as continuation of the growth-oriented measures that would boost employment generation, CII chief mentor Tarun Das said that it had no major negatives.

"Industry will be happy as there are no major negatives. The budget has cut down the customs duty and has covered a lot of industries as well,'' Mr. Tarun Das said immediately after the presentation of the budget.

CII chief Yogesh Deveshwar said the budget "aims at making India a global manufacturing hub and at the same time targets growth in the rural sector to enable the effect of growth trickle down to the `aam admi.'

The Finance Minister has performed a fine balancing act by not introducing new taxes or increasing the tax burden but at the same time has increased the budgetary allocation to social and rural sectors.

Mr. Deveshwar welcomed fiscal consolidation by controlling the deficit situation, face lift for infrastructure in terms of FDI policy for attracting investment, de-reservation of 180 items reserved for the SSI sector besides the boost to the manufacturing sector. While describing as positive relaxations on Fringe Benefit Tax (FBT), CII said industry would have greatly appreciated abolition of the tax or the option of paying one per cent additional corporate tax in lieu of FBT.

Terming the announcement about introduction of a comprehensive Goods and Services Tax by 2010 as a major positive feature of the budget, FICCI chief Saroj Kumar Poddar said the emphasis on growth and investment had been reflected in the higher allocation for critical sectors, which should push up the growth rate in the near future.

He welcomed the focussed attention on creation of physical infrastructure in the form of roads, ports and airports besides adding to the power generation capacity. The announcement of implementation of Goods and Services Tax by April 1, 2010 is a welcome step in the direction of treating services and manufactured goods at par for taxation purpose, Anil K. Agarwal, Associated Chambers of Commerce and Industry of India (Assocham) president, said.

P. Prabhakar, President, Indo-American Chamber of Commerce, said the proposals such as containing the budget deficit to 3.8 per cent of the Gross Domestic Product (GDP) and containing the revenue deficit and inflation to a manageable level would trigger a growth of about 8 per cent in the next fiscal.

The decision to have an Outcome Budget was a step in the right direction to monitor the policy impact and to make appropriate corrections.

Printer friendly page
Send this article to Friends by E-Mail

Business

News Update

Stories in this Section