The Hindu : Andhra Pradesh / Visakhapatnam News : Expert picks holes in Union budget

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Sunday, Mar 13, 2011
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Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Expert picks holes in Union budget

Special Correspondent

‘Thrust on FIIs will impact stock market'

VISAKHAPATNAM: The emphasis laid on foreign institutional investors (FII) in the Union Budget for 2011-12 would make the stock market highly unpredictable, according to V.L. Rao, professor of economics, GITAM School of International Business.

He was speaking at a symposium on budgetary changes in direct and indirect taxes organised jointly by the Andhra Chamber of Commerce (ACC) and GITAM School of International Business here on Saturday.

Mr. Rao said the thrust imposed on FII would make the stock market volatile. He regretted that budget proposals had failed to address the problems of agriculture and controlling inflationary trends. There was not much to cheer to boost production of pulses and oilseeds.

Commissioner of Income Tax S.S. Mishra said the income level was increasing phenomenally over the last few years and hoped that the economy would grow further so as to improve in the quality of living of all sections.

Stating that Visakhapatnam had a bright future with an excellent hinterland, he said the city should get a regular freight carrier. On the unhappiness expressed by Special Economic Zone (SEZ) entrepreneurs over end of tax holiday and introduction of MAT, he said change was inevitable. On the whole, he said, the budget was growth-oriented, balanced and forward looking.

ACC Visakhapatnam Advisory Committee chairman M.V.V.S. Murthi said the stability in the rates of customs duty, Central Excise duty and service tax were welcome and in line towards introduction of GST from 2012-13. The changes in service tax rules, particularly import of services and rationalisation of credit mechanism and simplification of refund procedures were wholeheartedly welcomed by the industry and the trade.

Mr. Murthi said the Finance Minister could have been more liberal in increasing income tax exemption limit to Rs.2 lakhs instead of Rs.1.8 lakhs for the individuals. The service tax levy on health check-up and diagnostic laboratories could have been avoided when the need was to make the medical services affordable to all.

Increase in MAT would marginally hit a company's profitability he said and remarked that the relief given on one hand (reduction of corporate surcharge tax up to five per cent) had been taken away by the other hand.

Additional Commissioner of Central Excise and Service Tax U. Niranjan, Deputy Commissioner of Customs B. Sumidha Devi, tax consultant G. Prabhakara Sastry and others spoke.

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