Vote on Account in right direction to reduce fiscal deficit, boost consumer demand and enhance investments: PHD Chamber

The Vote on Account is highly encouraging on measures to revive manufacturing sector growth with a boost to capital investments, declining fiscal deficit, stabilizing current account deficit and moderating inflation, said Mr. Sharad Jaipuria, President, PHD Chamber of Commerce and Industry, in a statement issued here today.

The reduction in excise duties will not only enhance consumer demand vis-vis decline in prices but also propel manufacturing activity and expansion in employment scenario, said Mr. Jaipuria.

The interim budget proposes to reduce the excise duties from 12% to 10% in the capital goods and consumer non-durables, from 12% to 8% on small cars, motor cycles, scooters and commercial vehicles, from 30% to 24% on SUVs and from 27/24% to 24/20% on large and mid-segment cars.

Mr. Jaipuria expressed happiness that the current year (2013-14) as indicated by the Finance Minister in today's vote of account would end with 4.6% of fiscal deficit which is lower than the anticipated level of 4.8%. The fiscal deficit estimates for the coming financial year at 4.1% are also inspiring with the increased subsidies scenario for food, fertilizers and fuel at Rs. 2,46, 397 crore.

The Chamber complimented the Finance Minister for containing the current account deficit at US$45bn which is significantly lower than the last year (2012-13) estimates of US$88bn. The reduced CAD will help Rupee to stabilize with a positive bias.

The Hon' able Finance Minister's appeal to all political parties to resolve to pass the GST laws and DTC in 2014-15 will improve the business sentiments in the economy, going forward, said Mr. Jaipuria.

The UPA government announces Vision for the Future with ten tasks that must be undertaken by the government of the day which includes fiscal consolidation, financing of CAD with foreign inflows, price stability and growth, reforms in the financial sector, re-building infrastructure, manufacturing for exports, subsidies only to the absolutely deserving, urbanisation, skill development and sharing responsibility between states and centre.

The ten points announced in the Vision for the Future are inspiring and also are in-line with the thought process of PHD Chamber and if implemented effectively would push India's economic growth in the double-digit trajectory, going forward, said Mr. Jaipuria.

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