Budget raises great hope for State
MADHYA PRADESH, being predominantly agricultural state, stands to gain a lot from the Union budget 2006-2007 that has main thrust on farm sector. Besides power, textile, food processing, auto and tourism are the other areas where MP can leverage its natural and human resources to tap the plethora of incentives offered by Finance Minister P Chidambaram.india Updated: Mar 01, 2006 12:54 IST
MADHYA PRADESH, being predominantly agricultural state, stands to gain a lot from the Union budget 2006-2007 that has main thrust on farm sector. Besides power, textile, food processing, auto and tourism are the other areas where MP can leverage its natural and human resources to tap the plethora of incentives offered by Finance Minister P Chidambaram.
However, the most important announcement that could provide big boost to the State’s economy is more liberal credit and banking facilities to the agriculturists.
The budget has announced several measures like provision of Rs 175,000 crore for farm credit, NABARD’s credit-linkage scheme to link 3.85 lakh new SHGs, Rs 1000 crore corpus to NABARD for refinancing food-processing units, special thrust on micro-financing, strengthening of cooperative institutions and credit to farmers at seven percent interest.
“With agriculture contributing to the State GDP in a big way, FM’s budget announcements would help in bringing desired growth in the farm sector,” said convener, State-Level Bankers’ Committee (SLBC), R P Tripathi.
“The State Bank of India and Allahabad Bank are the biggest bankers for the farm sector. We’re also on our way to have a special SLBC meet on micro-financing, as special thrust has been laid on it,” he added.
Following the Vaidyanathan Committee recommendations, the Central government has earmarked Rs 14,000 crore towards strengthening of cooperative institutions in the country. MP has already kept a provision of Rs 140 crore as its share in the State budget. The State’s self-help groups could be benefited from NABARD’s credit linkage scheme.
As the MP Government has given thrust on developing food-processing units, both in industrial policy and the State budget, FM’s stress on keeping the sector on priority by banks for lending would prove beneficial.
MP has also been identified for one of the five mega power projects at coal pithead. “It would immensely help in bridging the 1200 MW demand-supply gap in power in the State,” remarked president, Association of Industries- Mandideep, D K Jain.
Textile, food processing, automobile, gems & jewellery, construction and cement are the other sectors that could leverage from the Union Budget. “There lies a huge potential in MP in these sectors, which needs to be tapped vigorously,” feels president, Pithampur Audyogik Sangathan, Gautam Kothari.
Today’s budget announcement on sops for apparel parks, textile upgradation fund, increasing provision of handloom sector and reduction in excise duty from 16 to 8 per cent on man-made cotton yarn would help entrepreneurs as the State Government also announced setting up of apparel parks and auto cluster.
“Policy pronouncements about mining, power, coal, agriculture and textile would bring great job opportunities in MP,” adds resident director, PHDCCI, Rajendra Kothari.
Tax rationalisation announced for gems & jewellery could prove helpful for the State’s proposed gems park. Simultaneously, Bhopal’s BHEL unit may also be benefited. The FM announced that the BHEL would benefit due to 5000 MW of additional power generation.
Madhya Pradesh CII’s chairman, Vipin Mullick opined that the State’s auto-component sector would benefit by the reduction in prices of small cars. However, it is the SSI sector, which is quite upbeat over the announcement on reducing the one-time guarantee fee from 2.5 to 1.5 percent for all loans under CGTSI, along with de-reservation of 180 items for the SSI sector.
“This is a positive step and we also expect that the State Government would leverage from the cluster development scheme announced today,” remarked president, Govindpura Industries Association, Shalabh Sharma.
But, as a word of caution, Gautam Kothari points out, “State would draw benefit provided the government and bureaucracy are able to exploit the offers sincerely.”