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Chauhan hails budget, slams some provisions

Staff Correspondent

Chief Minister decries decision to lower excise duty on aerated drinks

BHOPAL: Madhya Pradesh Chief Minister Shivraj Singh Chauhan welcomed Finance Minister P. Chidambaram's proposal to lower the short term interest rates from 9 to 7 per cent for loans up to Rs. 3 lakhs for farmers but said it was unfortunate that the State Governments had not been spared the burden of the banking cash transaction tax.

The Chief Minister welcomed the Finance Minister's announcement that Rs. 5 crores was proposed to be sanctioned for the Kasturba Gandhi Trust, Indore, as well as the acknowledgment in his Budget speech that the State Government's proposal under the Jawaharlal Nehru Urban Renewal Programme was being considered. He also praised the announcement regarding Centre's clearance for a mega power project in Madhya Pradesh. Expressing his reservations, the Chief Minister said that in the last Budget, there was an announcement for a backward area development fund.

The latest Budget also talks of this fund but makes no mention of the number of districts that would be benefited by it.

The Finance Minister's Budget speech is also silent when it comes to offering concrete proposals for the development of backward areas. Mr. Chauhan said that few States were exempted from Central Excise Duty. Madhya Pradesh is a fit case for a similar exemption since it continues to remain backward but the State's demand has been brushed aside, he pointed out.

The Chief Minister said the decision to lower excise duty on aerated drinks would only benefit the upper class and multinational companies.

On behalf of PHDCCI, its State Coordinator Rajendra Kothari said the Finance Minister has not introduced any measure to simplify the direct taxes structure. Even the continuation of surcharge and cess was unfortunate, he said while pointing out that there is no accountability about how the education cess has been used.

The industry was looking forward to the rationalisation of at least the fringe benefit tax (FBT). But FBT will continue to be levied on genuine business expenses including tour and travel and boarding and lodging.

The increase in the rate of Minimum Alternate Tax (MAT) is also uncalled for since it will increase the tax liability of companies with not so healthy bottom-lines. Mr. Kothari said that the levy of CVD on all imports except a few, would also remove the negative protection to the domestic industry.

The SED should have been removed for all cars and not only for small cars, he said, adding that increase in Service Tax to 12 per cent should have been avoided as more services have been brought under the tax net.

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