Financial Daily from THE HINDU group of publications
Saturday, Mar 02, 2002
Industry & Economy
`Budget will not spur industrial growth'
CHENNAI, March 1
INDUSTRY associations have expressed dissatisfaction with the Budget, which according to them holds little to provide a boost to the industry, but have welcomed initiatives aimed at encouraging various sectors such as agriculture, rural development and infrastructure.
According to Mr R. Muthu, President, The Southern India Chamber of Commerce and Industry, the Budget aims at consolidating but does not provide any `stimulus to accelerate economic growth'.
Also, with the Government proposing to levy a dividend tax, there was no incentive to savings and capital formation. The largest taxpayer base, the `salaried middle class', had not been provided any relief, he said.
The allocation of funds to tourism, increased assistance to State plans, rationalisation of the customs and excise duty were welcome features, the chamber release said.
The Industrial and Financial Reconstruction Association for Small and Tiny Enterprises felt that the Budget failed to stimulate industrial growth, particularly the small-scale sector.
In a press release, the association said that the dereservation of 50 items without providing monetary assistance for the upgradation of small-scale units would adversely affect the sector.
The abolition of the SICA, the proposal for a pilot asset reconstruction company to take over the non-performing assets of the banks would benefit only the organised large units. The tax exemption to credit guarantee trust scheme for small industries was `meaningless' because the scheme had not been taken off as envisaged to benefit small and tiny enterprises, the release said.
The Tamil Chamber of Commerce has regretted that the slab rates of income-tax have not been lowered to benefit taxpayers. It has requested that the benefit under Section 88 be restored and the surcharge reduced to two per cent from five per cent. It has welcomed the thrust to various sectors including agriculture, infrastructure and rural development.
The Ambattur Industrial Estate Manufacturers' Association has described the surcharge on income-tax and dividend tax as a retrograde step.
In a press release, the association said the Budget had done nothing to boost the manufacturing sector or the small-scale sector which had been in recession for the last three years.
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