From Our Special Correspondent
Daijiworld Media Network
Bengaluru, Feb 1: Two of the leading industry and commerce bodies, the Bangalore Chamber of Industry and Commerce (BCIC) and Karnataka Small Scale Industries Association (KASSIA) have welcomed Arun Jaitely’s third and the first-ever combined budget, including that of railways, for the year 2017-18 asa “growth focused budget.”
The budget will boost macroeconomics of the country despite serious crises in the global economy and political uncertainties, with specific emphasis on the development of core sectors especially infrastructure, Agriculture, Rural sectors for the next two years, they said.
The BCIC said budget was a promise of containing Fiscal Deficit for FY17-18 to 3.2 per cent of the GDP and targeting to further prune it to 3 percent in the next two years without compromising on the spending on development schemes.
Thyagu Valliappa, President, BCIC said, “The Budget has a slew of policy oriented announcements and targets set for infrastructure, manufacturing, digital India, public sector, social sector, finance and corporate and income tax reforms, agriculture sector and investment on Education, Skill development which we believe will spur overall economic growth as it clearly sets the right tone for the next the two years”.
He further said the budget is focussed on “efficiency and transparency on the long term ultimately aiming at improving and spurring the economy under the prevalent difficult challenging financial space due to demonetisation and de-globalisation effect.”
Thyagu Valliappa said: “The huge capex push to inter-city, metro railway, road connectivity and development of Tier-II airports will radically improve the mobility of masses.”
He also said “Labour reforms are yet another important announcement in this budget. We need to see how the implementation is effected to bring in reforms in this critical sector. The focus on Skill development and emphasis on college education is also a welcome measure.”
Welcoming the Budget 2017-18, K R Sekar, Chairman, State Taxes Committee, BCIC and Partner, Global Business Tax, Deloitte said: “We expected corporate tax cut for the big companies, but that has not come through despite the Government promising to reduce it to 25 percent in the next two years. However, reduction in the rate of tax for SMEs from existing 30 to 25 percent is the most welcome measure. This significant change is made to provide the necessary boost to the MSME sector. If MSMEs are able to source lower credit it will provide the necessary impetus to job creation which is very crucial at this point of time.”
Sekar said, “The abolition of FIPB is a step in the right direction and given the current state of Indian economy it sends all the right signals to overseas investors.”
“The Finance Minister's announcement to confiscate assets of loan evaders is a very encouraging feature as this will radically reduce NPAs which is eating into government exchequer. Similar is the announcement of cleaning up of political funding. Both these are path-breaking and will radically enhance brand equity of India not only with the domestic but also overseas investors,” he added.
The BCIC feels that the Budget tries to provide a stable, predictable and consistent policy framework to facilitate long-term investment decisions.
The Finance Minister has done a balancing act by focusing his attention on all sectors without overtly hurting or appeasing any individual section of the Society and all the policy initiatives seamlessly integrate with the proposed GST rollout post June 2017, it said.
KASSIA has welcomed the Union budget laid emphasis on infrastructure development and augmentation which is crucial for the growth of the economy.
The allocation of Rs 3.96 lakh crore for infrastructure development and the special emphasis on road development should help carry forward the work undertaken in this important segment in the previous years.
Even this amount of allocation may not be adequate considering the infrastructure challenges that face the country. The thrust laid on rural roads and rural infrastructure and the allocation provided will hopefully give a spurt to the growth of the economy, at a time when there are serious fears of slow down and contraction, KASSIA president A Padmanabha said.
KASSIA welcomed the move of to reduce income tax payable by small companies up to turnover of Rs 50 crore by 5% to 25%. This should meet the demands of the sector as far as the income tax was concerned by giving the necessary encouragement for greater investments.
The doubling of the allocation under the Mudra Scheme to Rs 2.44 lakh crore was indeed important at a time when the SMEs have to struggle to access affordable funds for their development.
The Micro and Small Enterprises sector in particular suffers from inadequate access to finance at affordable rates of interest which is an area that needs to be particularly addressed in order to help this sector which has a big share in creating jobs and employment to the vulnerable section of the society, KASSIA added.