The Narendra Modi government’s first full budget on Saturday drew mixed reactions from industry captains in Madhya Pradesh with many saying that it failed to initiate the expected big-bang reforms.
Two of the biggest industry bodies, the Confederation of Indian Industry (CII) and PHD Chamber of Commerce, said the budget was “progressive” but also felt that finance minister Arun Jaitley missed out on an opportunity to open the reforms package despite a promising economic scenario marked by high Forex reserves, moderate inflation and high food stocks.
“Reforms in corporate tax structure, funds for infrastructure and rural infrastructure are good steps. However, we were expecting more for MSMEs. High expectation on reduction in MAT has also remained unfulfilled. The government should not have increased the service tax,” said RG Dwivedi, the regional director of PHD Chamber of Commerce.
The CII’s Malwa zone chairman Praveen Agarwal, also termed it as a “very average budget” which did not fulfill the expectations of the industry. “The biggest opportunity available with the government in the form of the budget to convert its intent into action seems to have been missed, with no concrete steps to boost the economy and industrial growth,” he added.
In two separate post-budget events organised by the CII in capital Bhopal and Indore, the state’s commercial hub, many industry leader said that Jaitley failed to deliver on expected lines.
Industrialist Jagdish Verma said the finance minister has come out with a "purely bureaucratic budget."
“Going by the Economic Survey, I was expecting some major announcements, but that has not happened. All the economic parameters were favourable and the time was ripe to take some bold decisions and improve ease of doing business. I think we have not (just) missed the bus, we have missed the plane.”
CII’s state chairman CE Fernandis also saw the budget as “very positive” while the industry body’s former chairperson RS Goswami put the onus on the state in maximum utilisation of the funds that would become available.
Appreciating the Centre’s decision decentralise tax share, ensuring increased revenue for the states, he said that “the responsibility of the state government has increased”.
Other industrialists also felt the move would help the state government to become financially self-sufficient and push infrastructure projects besides initiating welfare projects according to its own priority.
Terming the budget as disappointing, Pithampur Audyogik Sangathan president Gautam Kothari said the finance minister has not reduced or done away with minimum alternate tax (MAT) for the industries operating in special economic zone (SEZ) as was widely expected. He also pointed out that while the finance minister has allocated Rs 1,200 crore for Delhi-Mumbai Industrial Corridor (DMIC) investment regions in Gujarat and Maharashtra, no mention was made of Pithampur-Dhar-Mhow investment region. “Some projects such as smart industrial city near Ujjain and Narmada-Kshipra Link water supply have been marked as early bird projects under DMIC, but it's surprising that there was no mention of Pithampur investment zone,” he said.
Financial expert PD Nagar was of the opinion that income tax exemption limit for individuals should have been raised and more measures announced to boost savings that would have increased consumption and led to higher industrial growth.
On reduction in corporate tax from 30% to 25% over a period of four years, he said that effectively the tax has been reduced at 1.25% per year and that was not much. He also said that gold bonds are unlikely to lessen Indian's appetite for the yellow metal as was the government’s intention.