Industry welcomes Budget proposals

Industry welcomes Budget proposals
The Hindu Business Line, July 8, 2009, Page 15

Our Bureau, New Delhi

Industry on Tuesday congratulated the Finance Minister for paying heed to their suggestions in the Budget.

Welcoming the Budget, the Confederation of Indian Industries (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI) have said they were grateful that their pre-Budget proposals of abolishing Fringe Benefit Tax and Commodity Transaction Tax were considered. They also thanked Mr Pranab Mukherjee, Finance Minister, for largely continuing with the excise and Customs duties and for announcing the rollout of the GST next year.

Speaking to the Finance Minister at an interactive meeting with industry, Mr Venu Srinivasan, President, CII, said, “Your focus on rural markets, employment generation and creating economic opportunities in rural areas would bear fruit for generations to come.” Mr Harsh Pati Singhania, President, FICCI, said, “One element of investment led growth in the Budget was the big boost to the infrastructure sector by earmarking Rs 1 lakh crore for PPP projects, besides a huge emphasis on rural infrastructure.”

He added that the targeted agricultural credit flow of Rs 3.25 lakh crore could propel the rural economy.

However, Mr Singhania suggested that the indigenous defence industry should be given exemption from Customs duty and imported capital goods. Also, a Rs 100-crore technology fund should be setup for SMEs engaged in defence production. Regarding agriculture, he said that cold chain and warehousing should be given infrastructure status, while for education the PPP model on the lines of ITI schemes should be adopted for schools and universities.

He further added that additional exemptions for all subscription to New Pension Scheme (NPS) over and above Rs 1 lakh should be allowed and insurance legislation should be taken forward to enable the flow of long-term money into the infrastructure sector. The cascading effect of dividend deduction tax also needs to be removed, he said.

Mr Srinivasan also expressed reservation on the high fiscal deficit and said that fiscal expansion is necessary under the current economic conditions. He suggested a partial monetisation of the fiscal deficit.