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Budget a forward step: IACC

The IACC chief P Prabhakar said that the economy should reverberate strong fundamentals to accelerate the growth impulses.

india Updated: Feb 28, 2006 19:26 IST

P Prabhakar, President, Indo-American Chamber of Commerce, while welcoming the Union Budget 2006-7 said that the Budget proposals such as containing the Budget Deficit to 3.8 per cent of the Gross Domestic Product (GDP), containing the Revenue Deficit and inflation to a manageable level will trigger a growth of about 8 per cent in the next fiscal.

In a statement issued on Tuesday, the IACC Chief said that the economy should reverberate strong fundamentals to accelerate the growth impulses and that should be gauged by a close monitoring of the trend of growth. The decision to have an Outcome Budget is a step in the right direction to monitor the policy impact and to take appropriate corrections.

Prabhakar opined that the sustained growth of the economy is dependant on factors like simultaneous growth of agriculture, manufacturing and services sectors. Various Budget proposals like reduction in the excise duty on textiles (from 16 per cent to 8 per cent), aerated water and reduction in customs duty a wide variety of goods, imposition of CVD on certain products to enable the manufacturers to avail credit etc are directed at giving critical push to the Indian Industry. "Naturally, the Indian industry was looking forward to have some more incentives like roll over of fiscal benefits under 10 A of the Income Tax Act for STPI units to promote services exports," says Prabhakar.

While complimenting the Finance Minister for not imposing any additional burden on industry and individuals with regard to direct taxes, Prabhakar said that the impact of enhancement of rate of MAT should be looked into to assess the impact on the industry. He also welcomed the changes made in the structure of Fringe Benefit Tax (FBT) and hoped that it would have a favorable impact on the industry.

First Published: Feb 28, 2006 19:26 IST