Industry chambers welcome ‘development-oriented’ budget

NEW DELHI - Industry organisations Monday hailed Finance Minister Pranab Mukherjee for presenting a “development-oriented” general budget.

“Finance Minister Pranab Mukherjee has done a fine balancing act to sustain economic growth, curb inflation, promote inclusive growth and maintain fiscal consolidation,” said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).

The budget is focused on investment environment, especially in agriculture and infrastructure sector, he said.

CII, in a statement, said that it welcomes the fact that the finance minister has refrained from any increase in the indirect tax rates and taken forward the move towards GST (goods and services tax).

“Move towards direct transfer of subsidies for kerosene, fertilizer, and LPG for BPL families will remove the inefficiencies that plague our delivery of welfare measures to under-privileged sections,” it said.

Meanwhile, the Federation of Indian Chambers of Commerce and Industry (FICCI) said the federal budget is a balanced effort to maintain growth momentum, while the global economy was still in a fragile state.

“Finance minister seems to be banking on the economy going well and therefore has placed his hopes on revenues rising on the back of overall higher growth of the economy,” said FICCI president Rajan Bharti Mittal.

The proposed disinvestment target of Rs.40,000 crore for 2011-12, development of mega clusters for labour intensive industries were some of the positive aspects of the budget, he said.

“The finance minister has also announced steps for roll out of the GST and DTC (direct tax code). These will create a favourable environment for the corporate sector,” he said, while adding that Minimum Alternative Tax (MAT) rates should have been reduced to 15 percent, rather being increased 0.5 percent.

However, Kumar Kandaswami, leader manufacturing, Deloitte India feels that the increase in crude oil prices can put an excessive pressure on fiscal deficit.

Above all, the crude prices going up due to disturbances in the middle-east are a huge factor. This can potentially play havoc with the balancing act and put pressure on the fiscal deficit, he said.

He further said that skills development, innovation, greening of manufacturing, infrastructure push and rural income generation would help the manufacturing sector.

“The increased allocation to the infrastructure, housing and agriculture sectors would significantly boost the demand for vehicles and capital equipment,” he said.