The Hindu : Tamil Nadu News : Mixed response in Tirupur

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Tuesday, Jul 07, 2009
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Tamil Nadu

Tamil Nadu

Mixed response in Tirupur

R. Vimal Kumar

Tirupur: The Union Budget has evoked varied response from the people in the Tirupur knitwear cluster.

While the extension of 2 per cent interest subvention scheme, applicable to few exporting sectors, till March 31, 2010, and removal of Fringe Benefit Tax were welcomed by the industrialists here, they expressed concern over the move to increase Minimum Alternate Tax (MAT) from 10 per cent to 15 per cent of the book profit.

“Increasing the MAT slab has been unwarranted at this juncture when corporate houses have been facing severe financial crunch following global recession. The hike is going to affect their cash flow,” S. Dhananjayan, a senior member of Institute of Chartered Accountants of India (ICAI), Tirupur, told ‘The Hindu’.

Economists feel that MAT increase was one of the reasons for the decline in stock prices soon after the presentation of the budget.

Knitwear exporters sounded jubilant that the Union Finance Minister had exempted transport of goods through roads and commission paid to foreign agents from the purview of service tax.

A Sakthivel, president, Tirupur Exporters Association, said that the decision to extend Market Development Assistance Scheme till the end of the fiscal was welcome.

“Similarly, allocation of Rs. 2,600 crore towards interest subsidy under Technology Upgradation Fund Scheme (TUFS), which is about Rs. 1,500 crore more than the last years allocation, will help the textile entrepreneurs to augment their production capabilities,” he added.

The working/salaried class people in the city had given a ‘thumbs up’ sign for the budget as they sounded happy that the income tax exemption limit was raised by Rs. 10,000 and 10 per cent surcharge on personal IT abolished. However, they felt that the ceiling on exemption could have been raised further considering the steep rise in living costs over the last few years.

Farming community expressed satisfaction over the allocation of additional Rs. 1,000 crore towards accelerated irrigation scheme. However, they sounded sceptical of the fund delivery mechanism.

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