BUDGET TALK: B.R. Bhat, general manager, Corporation Bank, sharing his views with A. Srinivasa Rao, president, KCCI,(left) at a discussion on the Union budget 2006-07 in Mangalore on Tuesday.

MANGALORE: Experts from industry and banks, who participated in a discussion on the union budget 2006-07 organised by The Hindu Business Line Club at St. Aloysius College here on Tuesday, agreed that the budget proposals have not affected the common man drastically.

A. Srinivasa Rao, President, Kanara Chamber of Commerce and Industry (KCCI), termed it a "family budget" but differed with some of the proposals.

Referring to the bank cash transaction tax (BCTT), he said the Chamber of Commerce and Industry is opposed to it. Mangalore has many cashew processing units and hotels that have provided employment to many people. Managements of these institutions have to withdraw cash in bulk to pay the salaries of their employees. In such a situation, tax on cash withdrawal will affect them. "Though we hoped that the Finance Minister would withdraw the tax this year, he did not do so," Mr. Rao said.

He said, as the Government has brought more services under the service tax net there is no need to increase service tax from 10 per cent to 12 per cent. By reducing prices of small cars, aerated drinks, ice-cream and idli and dosa mixes, the Finance Minister has shown his concern for families, he added.

B.R. Bhat, General Manager of Corporation Bank, said that the move to exempt fixed deposits up to Rs. 1 lakh for a five-year period from the tax net under Section 80 C of the Income Tax Act will lead to growth in deposits. Banks should take steps to make deposits more attractive, he added.

On the move to include the maintenance and operations of ATMs under the service tax net, he said whether or not banks will choose to transfer the tax to customers depends on the competition.

The Finance Minister has presented a budget without additional taxes, but the tax base has widened, he added. About 200 students from various management colleges in Mangalore participated in the event. P.G. Aquinas, Dean of Aloysius Institute of Business Administration, welcomed the gathering.

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