Chambers say it feels very good

Captains of the Indian industry today said the cut in excise duties on various items such as aviation turbine fuel (ATF), cellphones, computers, electrical appliances, bulk drugs and coal will help the already booming Indian economy grow further, and become globally competitive.

The newly-elected president of the Federation of Indian Chambers of Commerce and Industry (Ficci) YK Modi said the measures would add to the prevailing feel-good factor in the country.

"The new measures will propel India into a higher growth orbit," said Anand Mahindra, president of the Confederation of Indian Industry (CII). "It shows the government's commitment to reforms. It also belies expectations that reforms would be put in the backburner," he added.

The industry, however, remained dissatisfied with the government's decision to abolish the Special Additional Duty (SAD) of 4 per cent.

"It is a retrograde step. The effective drop in customs duty after the abolition of SAD would be in the range of 6 per cent-10 per cent," Modi said, adding that the levy of SAD should have been continued till the disabilities were addressed.

S Madhavan, executive director, PriceWaterhouseCoopers, however welcomed the abolition of SAD, saying "the duty had lost its focus and so the government has taken a good step in abolishing it."

He said that the most significant change has been the customs duty cut to 10 per cent for project imports as new projects will benefit while the effect on the production of domestic capital manufacturers can be heavy.

The reduction in excise duty on ATF and the decision to abolish inland air travel tax will boost the competitiveness of the domestic aviation industry and promote travel and tourism, the industrialists said.

Ravi Wig, president of PHDCCI said the reduction in custom duty on non-agricultural goods by 5-25 per cent is a step in a right direction.