| The finance minister's statement that Karnataka is VAT ready has further cheered them and has cleared the uncertainty that prevailed in the minds of trade and industry as to whether VAT will be ushered or not. |
| Welcoming the VAT introduction, CII, Kassia and BCIC said that with the new system in place from April 1, industry was confident that the government will achieve higher tax mobilisation. |
| "The preparedness of the state and its commitment to introduction of VAT in Karnataka, in keeping with the deadline, as announced by the empowered committee on VAT. We appreciate the far-sightedness of the government in continuing with the current sales tax incentives, to ensure seamlessness in the value chain," said CII Karnataka Chairman, K K Swamy. |
| Swamy added that the initiative of the government to curb trade diversion from the state by introduction of special entry tax on certain goods, was a welcome measure and will go a long way in strengthening the faith of industry in the government. |
| "The government's tax collection during 2004-05 which is expected to generate revenue surplus of Rs 508 crore, is definitely an indication of the economic growth of Karnataka," said S Chandrasekhar, president of BCIC. |
| The proposal to develop district-specific clusters based on the local strengths and resources is a move in the right direction. |
| The proposal for setting up a food-processing cluster in Mangalore, industrial valves cluster in Hubli-Dharwad and auto-component cluster in Shimoga augurs well with the national programme for development of industry-specific clusters, he added. |
| Industry also welcomed the increase in plan outlay for the irrigation sector, watershed development programmes, crop insurance, continuation of subsidy towards interest, waiver of interest and penal interest on co-operative loans availed by farmers and exemption of farmers from payment of registration fee for availing agricultural loans are all welcome measures which will set next year's economy on a well defined growth. |
| Chambers also expressed satisfaction over the commitment towards strengthening the state's infrastructure, especially by allocating Rs 95 crore for the Bangalore International Airport, Rs 109 crore for metro-rail and Rs 51 crore for various railway projects. |
| Decrease in tax on inter-state sale of two-wheelers, three-wheelers and plastic stitching yarn to 1 per cent will also encourage sales from state, said Swamy. |
| However, the SSI sector is unhappy with the budget as it did not redress its problems to improve national competitiveness and contained no measures to promote rehabilitation of sick units, said Mahadev S Dhadd, president, Kassia. |
| IT cos pat Siddaramaiah |
| The IT industry has cheered the state budget, announced here on Friday. It spent the second half of the year, to December 2004, confronting the government on bad roads in the capital, the heart of the state's IT industry. |
| Siddaramaiah has proposed in his budget for March 2006 that a more focussed expenditure will be made on improving roads and decongesting traffic. "We have taken up the improvement of roads around Bangalore at a cost of Rs 40 crore with private partnership," he said. |
| T V Mohandas Pai, chief financial officer of IT services firm Infosys Technologies, pointed out there was a growth environment in the state today, "The state is set to take off on the path of economic growth. Taxes have been buoyant with sales tax increasing by 27 per cent, growth at over 11 per cent and the revenue balance in surplus." |
| Pai said, "The IT sector has a large role to play in the tax buoyancy, having created 2.5 lakh high-paying jobs. |
| Investment in the social sector has increased and finance minister Siddaramaiah has done a very good job of managing finances. The future calls for much greater investment in infrastructure." |
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