CII and SOPA are happy; AIMP, hotel assn are not
THERE IS mixed reaction from traders and industries in the State to the State budget for 2006-07 presented in the Assembly today by Finance Minister Raghavji. While a section of the industries have welcomed the budget with bouquets, the Finance Minister also received brickbats from some others including the hotel industry for his third consecutive budget today.india Updated: Feb 22, 2006 00:46 IST
THERE IS mixed reaction from traders and industries in the State to the State budget for 2006-07 presented in the Assembly today by Finance Minister Raghavji. While a section of the industries have welcomed the budget with bouquets, the Finance Minister also received brickbats from some others including the hotel industry for his third consecutive budget today.
Welcoming the budget, CII Madhya Pradesh Chairman Vipin Mullick said the announcement of implementation of VAT in Madhya Pradesh from April 1, 2006 is a welcome step. It has been a long pending demand of CII in the interest of a level playing field and rationalisation of tax structures.
He also termed the State budget a mix of positive approach with a requirement of stronger measures to support the present industry and attract more investments in the State.
On the issue of fresh investments coming into the State, figure of Rs 15,000 crore by the end of December 2005 points only towards a start. This pace must be increased if we have to reach somewhere near the target set by the State Government.
Expressing satisfaction over the fact that the State Government has started making focused efforts to improve infrastructure in terms of power and roads, which are critical and fundamental components for industrial development, allocations to these sectors could have been more, Mullick said.
Welcoming the budget, SOPA president Rajesh Aggarwal said the finance minister has shown his good financial management capabilities by presenting a balanced budget. The slashing of stamp duty from 8 per cent to just one per cent on plants and machinery is a welcome step for all industries.
The formation of a State Farmers Board and the rise in investment in irrigation by 40 per cent would go a long way to boost industries in the State, he said.
Calling the budget normal and balanced, Pithampur Association president Gautam Kothari said there is nothing special for industries in the budget. Welcoming the implementation of VAT, Kothari said the budget is silent on the continuity of tax exemptions to industries.
Though the reduction of stamp duty from 8 per cent to one per cent on plants and machinery is a welcome step, there is nothing in the budget to attract new industries. Moreover, against the Government’s claim of Rs 50,000 crore investment in the State, the budget mentioned of a mere Rs 1,500 crore investments which shows the zeal of the Government towards investments in the State, Kothari said.
Vehemently criticizing the budget, Indore Hotel Association secretary Vinod Madra said increase in luxury tax would affect the hotel industry adversely. When compared to other states like Goa, luxury tax in MP is much higher which will affect the hotel industry’s business in the State.
The increase in bar licence from Rs 5 lakh to Rs 6 lakh will also affect the industry adversely, Madra said. Reacting strongly to the budget, Association of Industries Madhya Pradesh (AIMP) president Manohar Jurani said there is nothing to boost the small industries in the budget even though it is a fact that the small industries generate maximum number of employment.
Though the finance minister has announced the implementation of VAT, he is silent on entry tax which will work against the interest of industries.
Besides, the allocation of Rs 500 crore to power in the budget is not at all sufficient, as it should have been at least Rs 2,500 crore, Jurani said. Criticising the budget for implementing VAT, Malwa Chamber of Commerce president Preetamlal Dua said VAT should not have been implemented in the State as in the VAT implemented states, neither the traders nor the Governments are happy.
Moreover, there is no mention of the status of entry tax. An expert committee report on VAT says that there should not be more than 4-5 per cent tax on goods. But if VAT is implemented, there will be around 13-14 per cent tax which is against the interest of the traders, Dua said.
Taking strong exception to the announcement of VAT in the budget, Ahilya Chamber of Commerce and Industry secretary Sushil Surekha said traders should have been taken into confidence before announcing the implementation of budget.
There are several issues which have to be ironed out before implementing VAT. But, things are not clear as of now. The organisation which has been in the forefront of agitation against VAT in the State, is not against VAT, but against some of the provisions in it. Since the picture is not yet clear, the organisation is waiting for a clear picture, Surekha said.
Congress says impractical, BJP progressive
BOTH THE major political parties, Congress and BJP, differed in their reactions to the State budget presented by Finance Minister Raghavji today. While the BJP hailed the budget as progressive, the main Opposition party Congress criticised the budget as anti-poor and impractical.
Criticising the budget, senior Congress leader and former City Congress president Kripa Shankar Shukla said the budget is anti-poor and there is nothing in the budget for the uplift of the weaker sections of the society. Though the finance minister has promised several things in the budget, they are not practical. The budget is not in the interest of the common man and there is nothing for the Government employees, Shukla said.
Praising the budget, Bharatiya Janata Party (BJP) spokesman Govind Maloo said that the budget presented by State Finance Minister Raghvji today is a progressive one aimed at bringing the State among the most developed states in the country.
By allocating more funds to power, roads and drinking water, the finance minister has tried his best to provide relief to the common people of the State as these are the basic needs. The Rs 1,700 crore allocated for irrigation in the budget is the highest in the country for irrigation which will benefit the crores of farmers in the State, Maloo said.
By presenting such a progressive budget, the BJP Government has tried to bring the State back on the rails of progress. The strength of the State economy can be gauged from the fact that it is for the first time in 16 years that a deficit free budget was presented.
The 50 per cent increase in mid-day meal allocation will go a long way in providing food to the students of the State. The finance minister is trying to bring the State out of the tag of BIMARU states, Maloo said.
City BJP president Ramesh Mendola, BJP district president Gopal Choudhury, general secretaries Sudarshan Gupta and Harish Dagur said that by allocating Rs 1,000 crore to roads and Rs 1,200 to power, the finance minister has clearly expressed his priorities which will prove to be milestone in future.