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Budget balances growth objectives : FICCI President
New Delhi, February 29, 2008
FICCI President, Rajeev Chandrasekhar said that this is a
balanced budget that has taken care of both the growth of the
economy and the political compulsions of out time. He added,
“I am convinced that the budget will continue to spur growth
and FICCI hopes that the Prime Minister’s statement at FICCI’s
80th AGM that 9% growth is achievable holds true.”
FICCI had recommended that for the common men and women of the
country the income tax exemption limit be enhanced from Rs.
1.1 lakh to Rs. 1.5 lakh. The Finance Minister has announced
this and this will now give more purchasing power into the
hands of people and boost consumption.
Industry had also requested that the government take measures
to address the cascading affect of the Dividend Distribution
Tax. In the budget, the Finance Minister has taken up this
matter and the issue has been partially addressed. FICCI hopes
that as we go ahead further modifications will be made to
completely waive the cascading affect of DDT on multi-layered
corporates.
The Finance Minster’s major step in promoting hospitals and
the healthcare sector in tier 2 and tier 3 cities of the
country is also a very positive move. FICCI had urged the
government to give a boost to the healthcare sector and now
hopes that a further push will be given by granting
‘infrastructure status’ to the healthcare sector.
One of the major problems being faced by industry today is the
severe skill shortage across sectors and at all levels. In
this context FICCI feels that the Finance Ministers
announcement of setting up a non-profit corporation for
promoting skill development with an outlay of Rs 15, 000
crores is a fresh, new idea whose time had come.
Further, the Finance Minister in this budget has kept the peak
rate of customs duty on non-agricultural products unchanged.
This would help Indian industry in the face of the
appreciating Rupee. FICCI also welcomes the decision to lower
excise duties on a wide range of products and the
across-the-board reduction in cenvat rate from 16% to 14% as
this will give a boost to the manufacturing sector.
FICCI members from the pharma industry have expressed
satisfaction with the government’s decision to extend the tax
benefit from in-house research to outsourced research.
The massive loan waiver, to the tune of Rs. 60,000 crores,
announced for the farmers will serve its purpose only if
parallel reforms are undertaken in the agriculture sector.
Increasing agricultural productivity, strengthening agri-marketing
infrastructure and rejuvenating extension services are
essential to ensure that the farmers do not fall back into
another debt trap in a few year’s time.
FICCI has also welcomed the announcement on strengthening and
deepening of the corporate bond markets. This would be
particularly helpful for mobilizing funds for large
infrastructure projects.
The removal of Banking Cash Transaction Tax as well as further
modification of the Fringe Benefit Tax are also a welcome
steps.
Finally, the announcement of a tax rebate on contribution by
the youth for health insurance for their parents is a
progressive move and is in line with FICCI’s recommendation.
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