Financial Daily from THE HINDU group of publications
Wednesday, Feb 04, 2004
Industry & Economy
`A blueprint for development'
New Delhi , Feb. 3
WHILE hailing the Interim Budget proposals announced by the Finance Minister, Mr Jaswant Singh, on Tuesday India Inc termed it as a "blueprint for further hastening the process of growth and development''.
Even as the chambers welcomed it and even called it a "watershed for the Indian economy'', the proposals have failed to impress the exporting community, which referred to it as "disappointing''.
Mr Y.K. Modi, President, Federation of Indian Chambers of Commerce and Industry (FICCI), said, "The measures announced in the Interim Budget for fiscal consolidation, infrastructure, agriculture, financial and social sectors would further enhance the feel good factor and also boost an upbeat economic sentiment."
He felt that "reducing the fiscal deficit to 4.8 per cent of GDP in the current year (2003-04), which is much below the Budget projections of 5.6 per cent of GDP is in itself a major achievement in recent times."
The President of Confederation of Indian Industry (CII), Mr Anand Mahindra, said, "The Finance Minister has made it clear that we should stop expecting every economic decision to converge at one point of time and that policy making and reforms is an ongoing process."
He added that the focus on the agriculture sector is good because if the rural areas do well one gets better growth.
According to the Associated Chambers of Commerce and Industry of India (Assocham), President, Mr Mahendra K. Sanghi, "The adequate availability of credit at the reduced rate of interest to the SMEs and the rural economy including the farming sector will help generate employment, job opportunities and entrepreneurship, which is the need of the hour."
Stating that the Budget reaffirms the feel good factor, the PHD Chamber of Commerce and Industry (PHDCCI), President, Mr Ravi Wig, said, "Reduction in the stamp duty rates will help in reducing the transaction cost, thus adding to our competitiveness."
Further, various steps taken to make available credit to farmers at affordable cost and new crop insurance scheme for farmers and special sops for tea and sugar industry to revive them are indeed welcome, Mr Wig said.
However, the exporting community felt otherwise. Mr M. Rafeeque Ahmed, President of the Federation of Indian Export Organisations (FIEO), said, "The exporters were expecting tax relief in view of the appreciation of the Indian rupee to partly offset their losses. Further, the demand of the community to abolish stamp duty on foreign bills, which could have reduced transaction cost and time, have also not been agreed to."
The Indo-American Chamber of Commerce (IACC), President, Mr V. Rangaraj, said that the proposal to abolish tax on business process outsourcing (BPO) is a step in the right direction and will help many multinational companies especially from the US to set up centres for software development and IT enabled services in India. Further, corporate sector was also unanimous in welcoming the specific action on development financial institutions such as the IDBI and IFCI, which set at rest the industry's concerns on access to long-term funds.
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