Indian Budget 2010-11- Budget Proposals and Industry Reactions
ASSOCHAM-Budget proposals are pragmatic, positive, growth and development oriented
ASSOCHAM President Dr. Swati Piramal while welcoming Budget proposals, termed them as Pragmatic, positive, growth and development oriented as these aim at attaining inclusive growth.
The Finance Minister has performed the most balancing act under given circumstances by partially rolling out the Stimulus package and at the same time paid adequate attention for development of social sector and more specifically so for rural sectors, said Dr. Piramal.
Mr. Mukherjee has done his best in the budget proposals to fuel consumption and sufficiently incentivised renewable energy, infrastructure, research and development in health and equipped these sectors with reasonably higher allocations.
Dr. Piramal also welcomed a deadline set for introduction of GST and Direct Tax Code, pointing out that these would be major tax reforms which will not only provide tax reliefs to people and industry but also help the government realize higher tax collections.
According to ASSOCHAM, the budget proposals will bring in more money in hands of individuals as several good measures have been introduced in the Finance Bill in the form of tax relief's to general public. Mr. Mukherjee for the first time in the recent history of budget presentation placed huge faith in the private sector which will come forward to building Indian economy and help it achieve higher growth in years to come.
The ASSOCHAM has also welcomed announcements for bringing in more and more services under the purview of service tax by not tinkering with it's existing ceiling rate of 10%.
FICCI-Budget is growth oriented and forward looking
The Union Budget is growth oriented and forward looking, preparing the Indian economy post global financial meltdown for a sustained course to attain double digit growth. The Finance Minister has done a fine balancing job under trying circumstances, astutely managing fiscal deficit while keeping an eye on growthh, observed Mr. Harsh Pati Singhania, President, FICCI.
In the face of pressure for stimulus withdrawal, the Finance Minister has only partially increased the CENVAT rate from 8 percent to 10 percent. Secondly, he has not increased the service tax rate. Thirdly, he has restructured the income tax slabs in a manner which will leave more money in the hands of consumers and thereby encourage demandd, Mr. Singhania observed.
By and large, the Finance Minister has provided a stable tax and policy framework for the Indian Economy to move forwardd, he added.
However, industry is disappointed that the Finance Minister had raised the MAT rate from 15 percent to 18 percent when industry was demanding a cut down to 10 percent. Further, the impact of excise duty hike across the board coupled with increase in excise duty on petrol and diesel will add pressure on the price line in current circumstancess, Mr. Singhania noted.
However, industry appreciates the need for some fiscal correction. Mr. Singhania noted that the Finance Minister has laid out a roadmap for fiscal correction as well as radical reforms of the tax regime through introduction of GST and Direct Tax Code. He has given a little time for preparation for introduction of these from only next year, thereby providing time for further public debate on DTC and fine tuning administrative machinery for GSTT, he said.
FICCI President also noted with satisfaction the emphasis the Finance Minister has placed on overall development of critical sectors such as agriculture and rural development, which FICCI has been emphasizing. Enhanced outlays for infrastructure projects would also add to the growth momentum.
The Finance Ministerrs announcement to infuse more capital into Public Sector Banks is good for credit growth as this will enable banks to lend more for productive economic activities.
The reduction of surcharge on corporate tax rate has also been welcomed by Mr. Singhania.
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