Budget will revive economy, says industry bodies

Gujarat Chamber of Commerce and Industry president Utkarsh Shah saw the Budget as a catalyst for revival of the economy and boosting the growth rate on long-term basis. Liberal availability of credit given to the small scale industries sector and benefit of monthly payment of excise duty and doubling of exemption limits in respect of certain commodities are welcome relief's to this important sector, the GCCI added.

The GCCI felt that the levy of surcharge of 10 tier cent on the income above Rs 60,000 could have been avoided. It will be only a temporary measure as promised by the finance minister.

The measures taken in the area of foreign direct investment is a well thought out strategy. Moreover, 100 per cent automatic approval for FDI projects for the NRIs and clearance limit by the FIPB are conscious and positive efforts made towards promotion of investment in India. According to the GCCI, the thrust on agricultural development with multi- pronged programmes will further strengthen the rural economy and will lead to expansion in the areas of employment, income and exports.

The new gold deposit scheme floated in the Budget is a novel features as it will channelise idle gold for productive use in the national economy and save precious foreign exchange in this hour of need. GCCI complimented the finance minister for giving tremendous boost to infrastructure, agriculture and village-related activities as also for social and human resources development as it is a recognition of the fact that growth and rural development are, ultimately about empowerment of people".

The Ahmedabad Textile Mills Association felt that the additional burden of five per cent customs duty is likely to have an adverse impact on cotton imports. And the 10 per cent surcharge on corporate tax will have a negative impact on industries in general. Further a general increase in customs duty on capital goods will increase the cost and put pressure on the textile industry’s meager profitability, especially when it is preparing for modernisation under the TUFS, "The reinstatement of SSI exemption given to spinning units will propel excise evasion. On the other hand, the purpose of increasing the excise duty on cotton yarn was to check the excise evasion. These are some major anomalies in this Budget," ATMA stressed.

The Ahmedabad Finance Companies Association said that the Budget proposals were in continuum with the past trends of offering greater concession and relief for the growth and developments of finance sector in general. However, the Budget proposal has once again turned a blind eye to the genuine requirements and demands of the NBFC sector, AFCA added. "Though the finance companies are presently passing through a difficult time, the finance minister has offered nothing that can revive the NBFC industry. Even relief's granted to banks for handling NPAs are not extended to the NBFCs," AFCA stressed.

Overall the Budget is a balanced one. However the NBFC industry should have been given a level playing field in comparison to banks, it added.

Compiled from local news media.