Financial Daily from THE HINDU group of publications
Saturday, Mar 12, 2005
Industry & Economy
Industry happy with `growth-oriented' budget in Karnataka
Bangalore , March 11
THE Chairman of the Confederation of Indian Industry (CII) for Karnataka, Mr K.K. Swamy, has congratulated the Finance Minister, Mr Siddaramaiah, for presenting a development-led budget.
"We are happy that it is a growth-oriented budget," Mr Swamy who is also Deputy Managing Director of Toyota-Kirloskar Motor told Business Line.
Mr Swamy said the Finance Minister's statement on introduction of VAT is encouraging. He, however, said the industrial input should be left out of special entry tax.
"The end product should remain exempted from the extended list of special entry tax," Mr Swamy said.
Bangalore Chamber of Commerce and Industry (BCIC), said that the growth of 11.7 per cent in the State economy was heartening.
Mr S. Chandrasekhar, President, BCIC, said the State Budget was in synchronisation with the Union Budget reflecting a strong bias towards accelerating development in the rural areas and a significant increase in tax collection during the year 2004-05.
The expected revenue surplus of Rs 508 crore generated by higher tax collection was an indication of positive growth signal for the State.
The increase in plan outlay for irrigation sector, watershed development programmes, crop insurance, continuation of subsidy towards interest, waiver of interest and penal interest on co-operative loans availed of by farmers and exemption of farmers from payment of registration fee for available agricultural loans were welcome measures giving positive direction to the economic growth.
Allocation of Rs 95 crore for Bangalore International Airport, Rs 109 crore for Metro Rail project and Rs 51 crore for various rail projects were other welcome signals of the Government's concern for strengthening infrastructure. BCIC also welcomed the allocation of Rs 10 crore for setting up industry in the backward taluks and cluster-specific matrices.
Though there was no clarity on broad basing of entry tax and special entry tax after introduction of VAT, the trade and industry demanded that these taxesbe abolished.
Mr Chandrasekhar said the Finance Minister has not categorically stated that VAT would be introduced from April 1, though he mentioned that Karnataka was VAT-ready.
Karnataka Association of Small-Scale Industries said it was a well-craft budget for an all-round development with focus on agriculture, rural development and regional balance. However, it was disappointed over the absence of commitment and provision to clear the subsidy arrears of small-scale industries.
Karnataka Chambers of Commerce and Industry has welcomed the proposal to set up Karnataka State Industrial Development Council and said it would help in accelerating industrial development at a time when manufacturing had suffered a decline.
Allocations for various socio-economic, health and educational projects, setting up high-tech and bi-technology projects would give a fillip to development.
It also commended the Finance Minister for metering all electrical installations as the first step towards true "reforms in the vital " sector of power.
Mr T.V. Mohandas Pai - Chief Financial Officer and Director (Finance and Administration), Infosys Technologies, said: The State is set to take off on economic growth. The IT sector has a large role to play in the tax buoyancy, having created 2,50,000 high-paying jobs.
Investment in the social sector has increased and the Finance Minister, Mr Siddaramaiah, has done a very good job of managing finances.
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