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Big industries hail, small say not up to mark

UNION FINANCE Minister P Chidambaram received bouquets from the big industries here for what they termed as balancing and progressive budget. However, small industries termed the budget as ?not up to the expectations?.

india Updated: Mar 01, 2006 00:38 IST
HT Correspondent
HT Correspondent

UNION FINANCE Minister P Chidambaram received bouquets from the big industries here for what they termed as balancing and progressive budget. However, small industries termed the budget as ‘not up to the expectations’.

Hailing the budget, CII Madhya Pradesh Chairman Vipin Mullick said the finance minister has set the path for inclusive growth to boost employment generation. The budget is a continuation of the growth oriented measures announced in his previous two budgets that aim to make India a global manufacturing hub and at the same time target growth in the rural sector to enable the effect of growth trickle down to the “aam admi.”

Mullick said the prices of base metals coming down would help the engineering sector. Another feature beneficial for Madhya Pradesh is reduction in price of small cars, which will help the auto component sector of Madhya Pradesh. Setting up of 4,000 MW power plant at pit head in Madhya Pradesh will not only ease the power situation but will give advantages to the local industries in terms of ancillaries, markets and also employment.

A large number of measures have been announced that would go a long way to boost agricultural, food processing and the rural sector. The finance minister has also given emphasis on developmental aspects of growth, which included substantial increase in outlay of 31 per cent on education and 22 per cent increase in outlay on health compared to the previous budget.

The increased budgetary allocation for Bharat Nirman programme by 54 per cent would help accelerate development of rural infrastructure, which is a critical need to unlock the potential of the rural hinterland, Mullick said.

Hailing the budget as a milestone in the development of the Indian industry, SOPA Chairman Rajesh Aggarwal said the various provisions in the budget would not only help in poverty alleviation but also generate employment for the masses with special emphasis on the growth of education, employment, availability of drinking water and sanitation facilities and development of minorities and backward classes so that they could join the mainstream to benefit from the fruits of development.

Complimenting the finance minister for not levying excise duty on refined edible oil, the SOPA chairman said this single step, as in the past, would provide a level playing field to the domestic industry vis-à-vis the large scale units set up in the Excise Duty exempted areas such as Kutch.

The domestic refining industry will also benefit from the budget as the finance minister has kept the customs duty on edible oil unchanged and this would go a long way in providing the oilseed farmers a remunerative price for his produce and encourage production of more oilseeds in the country leading to better availability of domestic edible oil and less imports of edible oil, thereby saving valuable foreign exchange.

Welcoming the budget as “by and large good but not exciting,” Pithampur Audyogik Sanghathan president Gautham Kothari said that the textile industry, food processing industry, petroleum sector and gem & jewellery sector would get a boost. The excise duty reduction on several items is a welcome step. But, by not changing the duty on pharmaceuticals, the finance minister has disappointed the pharma sector. Besides, the hike in service tax will also have a bad effect.

Moreover, the allocation for power sector should have been more as still there is a gap of 7,000 mw power, Kothari said. Criticising the budget, Association of Industries Madhya Pradesh (AIMP) president Manohar Jurani said the finance minister in his budget has completely ignored the small industries sector which has the potential of generating large employment.

Prices will rise due to the hike in service tax. “Overall it is hi-fi budget,” Jurani said. All India Manufacturers Organisation (AIMO) president Mahesh Mittal also said that the budget is not up to the expectation of the trade and industry. As the financial strength of the country is going from strength to strength, the finance minister should have abolished the fringe benefit tax.

The budget is also silent on the central sales tax which should have been reduced to 2 per cent before phasing out next year. The story about labour laws is also not different. The finance minister should also have simplified taxes and made reforms as per the expectations of the trade and industry, Mittal said.

First Published: Mar 01, 2006 00:38 IST