The Bangalore-based industry bodies have welcomed the Budget 2012 with caution. Finance Minister Pranab Mukherjee’s target of achieving a fiscal deficit of 4.6 per cent of the GDP, setting up of a public debt management agency (bill to be introduced), direct cash subsidy for kerosene, fertiliser and other products are some of the measures whole-heartedly welcomed by the chambers of commerce.
The Federation of Karnataka Chamber of Commerce and Industry (FKCCI) has said the GDP in 2011-12 is expected to grow over 9 per cent with all the policy initiatives envisaged in the budget. It has expressed satisfaction that at least now the Finance Minister has promised to implement the DTC from April 1, 2012. Like in the case of Karnataka budget, FKCCI is happy that the Union Budget has also focused on developing the agriculture sector. FKCCI is happy the much-needed initiatives are being taken to accelerate infrastructure development. Initiation of the Infrastructure Debt Fund, infrastructure tax-free bonds worth Rs 30,000 crore, extending the saving benefits on infrastructure bonds to Rs 40,000, are welcome steps to mobilise funds for the sector, it said.
Support to Micro, Small and Medium Enterprises (MSME) by allocating funds worth of Rs 5,000 crore to SIDBI and Rs 3,000 crore to Nabard would help meet the capital requirements of the MSME sector, the federation said.
Meanwhile, the Bangalore Chamber of Industry and Commerce (BCIC) has applauded the government for making UID a reality with enrolments targeted at 1 million UIDs per day. Focus on the microfinance investment sector and the setting up of a Rs 100 crore microfinance equity fund is a welcome move, the chamber said. It said, deduction in the rate of tax to 15 per cent on dividend received from overseas subsidiaries would enhance the possibility of securing additional funds which is otherwise parked outside. Announcements of mortgage risk guarantee fund is another good move as it will enable housing for the less privileged.
Interest subvention of small and marginal farmers have been retained at 7 per cent, which will help the government treasury and the enhancement of the interest of subvention of 3 per cent for timely repayment is very appropriate to bring the culture of prompt payment, it added. However, the BCIC said that the finance minister missed an opportunity to reduce customs duty on crude oil.
Increase in the MAT rate is not conducive to the growth of the manufacturing sector. With oil prices going above $100 a barrel and with the political instability in Africa and Middle East, there is a definite possibility of oil prices hurting the economy.
“The Government however missed a great opportunity in making any major announcements to incentivise the usage of hybrid and electric vehicles to reduce the impact on over dependence of oil imports. However, we commend the proposed setting up of a National Mission on Hybrid Vehicles. We hope the government will expedite this measure to encourage faster transition to newer technologies,” BCIC added.