Tamil Nadu   

Industry welcomes steps on rural development

Staff Reporter

Expresses disappointment at continuation of fringe benefit tax

CHENNAI: Trade and industry in Tamil Nadu on Monday received the Union budget proposals with cautious optimism.

Welcoming measures aimed at infrastructure and rural development, they criticised the continuation of the fringe benefit tax and the two per cent increase in service tax.

"Expectations dashed"

Industry leaders led by southern region chairman of the Confederation of Indian Industry R. ParasuRaman said the "mild touch" on FBT could, perhaps, lead to further complication. It had dashed expectations about its abolition.

Describing the investments proposed for rural and infrastructure development schemes as significant, he, however, said there was not much clarity on the source of additional revenue required.

T. Kannan, managing director of Thiagarajar Mills Limited, hailed the increase in the Technology Upgradation Fund (TUF), reduction in import duty on polyester fibre and rationalisation of excise duty. Chairman and Managing Director of Loyal Textile Mills Manikam Ramaswami said the TUF allocation should have been higher and the programme tenure increased.

Customs duty

Ravi Santhanam, Managing Director of Hindustan Motors Limited, K. Sridharan, Executive Director (Finance) of Ashok Leyland Limited, and Jayadev Galla, Managing Director of Amara Raja Batteries Limited, said the reduction in the peak rate of customs duty would benefit automobile and auto component industries.

Joint Managing Director of W.S. Industries (India) Limited Narayan Sethuramon said the budget lacked any proposals for the power sector, one of the largest employers. B. Santhanam, Managing Director of Saint Gobain Glass India Limited, said while the emphasis on development of industrial clusters was good, the budget was disappointing as it did not offer any incentive for research and development.

Sugar industry

According to Rajshree Pathy, Chairperson and Managing Director of Rajshree Sugars and Chemicals Limited, said there was no announcement regarding the sugar industry, which had expected a switch from the flat rate of excise duty on molasses to an ad-valorem structure and fillip to the ethanol (in petrol) programme.

Hindustan Chamber of Commerce president Ashok R. Thakkar termed the increase in service tax disappointing. He was addressing an interactive session organised by the Chamber and the State Council of the Federation of Indian Chamber of Commerce and Industry.

Rafeeque Ahmed, Chairman of FICCI State Council and the Council for Leather Exports, said absence of any significant tax concessions for boosting leather exports was disappointing. Apart from the "meagre excise duty relief" on footwear priced between Rs. 250 and Rs. 750, none of the representations made by the industry had been conceded. Even while complimenting the Union Finance Minister for trying to accelerate economic growth, former Revenue Secretary, M.R. Sivaraman, called for a better monitoring mechanism to ensure that farmers benefited from the proposals for the agriculture sector. But he condemned the move to levy service tax on automated teller machines, saying it would "break the growth of the economy."

P. Murari, adviser to the FICCI president, wondered why there was no mention of the new Pay Commission on which the Prime Minister had given an assurance.

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