Budget evokes no applaud

CII Andhra disappointed.

The Confederation of Indian Industry (CII), Andhra Pradesh region, is disappointed over the fact that several of industry's requests on the tax front were not considered in the Union Budget.

It also felt that many of the future issues related to industry either remained uncertain or needed further clarity.

"We requested the finance ministry to reduce the dividend distribution tax to 5 per cent from the existing 12 per cent while the finance minister increased it further to 15 per cent. Similarly, the industry body asked for the reduction of central sales tax to 2 per cent from the existing 4 per cent but the demand was halfway met. We wanted reduction in the service tax rate whereas the finance minister has simply extended the existing tax rates to new areas," G Vinod, chairman, CII, Andhra Pradesh, said.

Pradip Dhobale, vice-chairman, CII Andhra region, and divisional head of ITC, said the plantation status extended to cashew and coconut should also have been extended to woodpulp plantation that has now become an agriculture activity. He said the initiatives announced on the energy development front were inadequate and should have covered captive power development as well.

Y Harish Chandra Prasad, head of energy division, CII, and vice-chairman and managing director of Malaxmi group, said the industry's long pending demand for appointing a regulator to determine gas pricing had not been addressed by the finance minister leading to further uncertainty with regard to the future plans of companies based on gas utilisation.

While welcoming the initiatives on promoting merchant power plants, he, however pointed out that no adequate stress was given on developing new transmission lines, a prerequisite for more power capacity addition in the country. He also said the fate of IT SEZs remained uncertain as the sunset clause on tax sops to the IT industry did not find any mention in the Budget.

D V Manohar, former chairman, CII, Andhra region, said the tax holiday for budget hotels coming up in the National Capital Region should have been extended to the entire country as there was a huge shortage of hotel rooms, the number of which needs to be doubled to meet the growing demand.

He also flayed the Budget for not giving adequate importance to the tourism sector in the country.

Cement price will go up

SRB Ramesh Chandra, president, All India Mini Cement Manufacturers Association said the decision to impose an excise duty of Rs 600 per tonne on cement with a retail price of over Rs 190 per bag will only inflate the cement prices further, instead of containing it.

Had the finance minister taken this kind of a measure last year, the initiative would have succeeded in checking the prices. Now, the cement prices across the country have far surpassed the Rs 190-mark.

For example, the retail price of cement in Delhi is around Rs 240. Can any company in Delhi bring down the price to below Rs 190 per bag just to avail of a relief of around Rs 12 per bag in terms of lower excise duty (including 3 per cent cess and VAT differential) when the company is getting more than twice the amount through sales? Therefore, no such governmental interventions are expected to change the course of demand-driven prices of cement.

Cement prices on Wednesday increased by Rs 10 per bag in many places across the country, which means that the companies are going to pass on the additional taxes to the consumers. It is not the housing sector that has been driving the cement consumption in the country.

Hence, the consumption levels are also not going to be affected on account of increased duties on cement. However, the Budget includes many growth-oriented initiatives that would provide ample opportunities to the industrial sector for further growth. No friendly policy changes C Parthasarathy,
chairman, Ficci-AP An opportunity of reaching a double-digit growth trajectory has been missed in view of the tax proposals in the Budget. As mentioned by the finance minister, manufacturing is the main driver of growth. But there are not many encouragements in the way of friendly policy changes, incentives, innovation,which are the need of the hour.

Economy cannot survive on service sector alone unless equal importance and similar facilities are extended to other sectors as well. For the agriculture sector, though a lot of brainstorming happened year after year, it is still discouraging. We hope all the things mentioned for the agricultural sector in the Budget would be implemented at least this time.

Little relief

Laxminiwas Sharma
President, Andhra Pradesh Tax Bar Association The finance minister has given a small relief of Rs 10,000 enhancement in threshold limit for individuals, Hindu undivided families (HUFs), women and senior citizens, medical insurance deduction up to Rs 1,5000 and for senior citizens Rs 20,000, and surcharge was removed up to the income of Rs 1 crore.

At the same time, he has put additional burden by increasing the education cess from 2 per cent to 3 per cent, enhancing the dividend distribution tax from 12.5 per cent to 15 per cent. The banking cash transaction tax should have been withdrawn, instead the minister raised the exemption from Rs 2,5000 to Rs 50,000 for individuals and HUFs.

He has increased the exemption limit under service tax for small service providers from Rs 4 lakh to Rs 8 lakh but brought a few more services such as renting immovable property for commercial use, design service etc in the net.

There was a lot of hope for relief in the Budget, but the benefits given by one hand is taken away by other.

Budget is farmer-friendly

Sudheer Sanghi,
President, Fapcci This is an out-and-out farmer-friendly Budget and is a good attempt at addressing the growth of the agricultural sector, which has not doing well for the last five to six years.

Targeting to bring an additional 50 lakh farmers under farm credit (Rs 2,25,000 crore in the new Budget), and 100 per cent subsidy for small farmers and 50 per cent for other farmers for water recharging scheme, among others, are welcome moves that would give a major boost to the ailing agricultural sector.

Besides, the finance minister has increased the Textile Upgradation Fund (TUF) to Rs 911 crore in the new Budget as against Rs 535 crore during 2006-07, extending the fund by five years. Andhra Pradesh will benefit the most as more and more companies would now prefer to set up textile firms in the state.