Budget: Mixed reaction from Industry

Chennai:

There has been mixed reaction from the Industry towards the Union budget with a section terming it disappointing while some calling it positive.

A panel of experts from Federation of Indian Chamber of Commerce and Industry (FICCI) hit out at the budget stating that Finance Minister P Chidambaram failed to address the need to bring down inflation.

“There is nothing in the budget that could bring in cheer to industry, business and common man,” said the FICCI panel of experts reacting to the Union budget.

Former revenue secretary M R Sivaraman, who was in the FICCI panel to discuss the implications of the budget, said that the failure to address the inflation would pose a serious problem to the common man.

The finance minister has also ignored on how to bring down the current account deficit, he said while welcoming the move to levy taxes on luxury goods like imported cars and bikes. He also said that the finance minister has not freed the industry from permits. “At a time when industries are shying away from investing in India, the government should have done away with the permit raj. Currently, to set up an industry, one needs hundreds of permission,” Sivaraman said.

S Rajaratnam, senior advocate and eminent tax management consultant, former member IT Appelate Tribunal said that the budget has nothing to attract foreign direct investment.

Madras Chamber of Commerce & Industry (MCCI) president T Shivaraman felt that the Budget presented by the Finance Minister, P Chidambaram, is in general, a positive budget. The fact that there are no populist measures and no new subsidies is to be appreciated.

The intention to contain fiscal deficit and the projections, if achieved, is appreciable. The commendable discipline in expenditure control during last year to keep the deficit at 5.1 per cent is a good sign. 

Some of the welcome proposals are the substantial additional allocation for JNNURM with a focus on urban transport. This and the increased allocation for Skill Development initiatives and human resource development in general will pave the way for long-term sustainable growth, he added.

Confederation of Indian Industry welcomed the budget and termed it as a balanced one that had fiscal consolidation in mind.  J N Amrolia, CEO of the Chennai Business School, said emphasis laid on skill development would go a long way in boosting the labour market. On the automobiles front, he opined that the fillip given to the JNNURM, where a substantial amount was allotted to the purchase of 10,000 buses, was a welcome one. 

A Krishnan, group CFO of Apollo Hospital Enterprises, said the move to allow insurance companies to open branches in tier-II cities and below without approval of IRDA was important one given that the penetration of insurance schemes, both medical and life, was very low in the country. "This would help improve the coverage," he opined. 

Initiatives such as encouraging loans through NABARD to establish warehouses at panchayat level was hailed and setting up of all-women public sector bank was hailed by the panel.