 |
Saturday,
March 1, 2003, Chandigarh, India  
|
Farm
sector ignored Jaswant
for lower interest regime Service
tax up
|
|
||||||||||||||||||||||||||||||
|
Reliefs to
IT firms restored A
growth-oriented Budget: industry Textile
sector gets incentive, relief Forward-looking
Budget: Mitra Budget
progressive: chambers It’s
an unconventional Budget
74 pc
FDI cap in banks proposed Gold
tumbles by Rs 210
|
|
Farm sector ignored Chandigarh, February 28 According to the Department of Agriculture, Punjab, the total annual consumption of urea in the state is 24 lakh tonnes. With the increase in market price by Rs 24 per quintal the farmers would be forced to shell out about Rs 60 crore annually. Similarly, the cost of pesticides and hybrid seeds is expected to increase at a time when the government has declined to increase the MSP of major crops. The economists alleged that an increase in the urea price would have maximum impact on Punjab and Haryana farmer who were using higher fertiliser as compared to their counterparts in the other states. Prof Sucha Singh Gill, Senior Economist at Punjabi University, Patiala, said, “It is ironical that the Finance Minister has provided relief to the salaried class and the industry by raising the income tax exemption limit and by cutting down the prices of cars, ACs and other luxury goods, but the farm sector has been totally ignored. There is nothing in the Budget for the farming sector, except the announcement of setting up of a task force under the chairmanship of Chandra Babu Naidu for promoting drip water irrigation.” He claimed that no efforts have been made to increase the rural credit, crop diversification and to enhance capital formation in the rural economy. Mr R.S. Sachdeva, Co-Chairman (Punjab Committee), PHDCCI, wondered how the demand would pick up by ignoring 60 per cent of population in the country. The increase in urea and diesel prices and other inputs would affect the disposable income of rural buyers.
|
|
Jaswant for lower interest regime New Delhi, February 28 After the presentation of the Budget, he said the decision on reducing the interest rates was taken in consultation with Reserve Bank of India Governor Bimal
Jalan. The higher interest rates could be a boon for the present generation, but it would lead to a debt trap for future generations, he said. While there was no move to immediately cut the interest rates on the Employees Provident Fund
(EPF) scheme, the Finance Minister said a decision would be arrived at in due course. However, Mr Jaswant Singh said he would not like to dictate terms to the EPF Board .On the rationale for providing higher allocation for Defence when the Budget for the current year stood unutilised to the extent of 20 per cent, Mr Jaswant Singh said the weapon procurement was determined on a 24-month cycle and not 12-month period. He said there was no scope for any rollbacks in the face of some tough decisions like the cut in the savings rate. He denied that it was an "election Budget." About the high fiscal deficit, Mr Jaswant Singh said he was constrained by a set of circumstances, including global economic slowdown, rising crude prices and likelihood of the Gulf war. He said the disinvestment receipts fell far below the target of Rs 12,000
crore. The agriculture sector growth was down from 5.7 per cent to minus 3.1 per cent. Even if the agriculture growth was zero per cent, the GDP growth would still have been 6 per cent. On the disinvestment target of Rs 13,000 crore for the fiscal 2003-04, when the target for the current fiscal was not achieved, he said the process had been through the learning experience. The Finance Minister justified the food subsidy of Rs 28,000
crore, saying that it was a pittance as compared to the doles given in the developed nations. "This will definitely increase exports," he said. He dismissed as a "political gimmick" the charges by the Congress and other Opposition that the Budget was "election-oriented".
|
|
Service tax up
New Delhi, February 28 While the increase in tax rates would be effective on enactment of the Finance Bill, the levy of tax on the new services would take effect from a date to be notified by the government, Finance Minister Jaswant Singh said. He also proposed extending the credit on service tax on input services to all services, saying that the credit would now be available even if the input and the final services fell under different categories. The tax at the rate of 8 per cent would be imposed on commercial vocational institutes, coaching centres and private tutorials, besides Internet cafe and franchises.
PTI
|
|
Reliefs to IT firms restored New Delhi, February 28 Finance Minister Jaswant Singh proposed that tax concessions extended to IT under Section 10 A and 10 B of the Income Tax Act would continue as originally envisaged. As per law, such companies are currently covered by these tax exemptions lose the benefits upon change in their ownership or shareholding. "This is not logical. I am, therefore, removing these restrictions; the benefit of such tax exemptions will remain even in the case of amalgamation or demerger", Mr Singh announced. Customs duty on specified electronic components for the IT industry is being reduced in conformity with WTO commitments, he said. The customs duty on a number of capital goods used by the telecom and IT sectors for manufacture of components will be reduced from 25 per cent 15 per cent. The tax holiday for telecom and domestic satellite service companies have been extended by one more year to March 31, 2004.
|
|
A growth-oriented Budget: industry New Delhi, February 28 “Laying emphasis on various sectors of the economy particularly physical infrastructure, the Finance Minister has initiated the exercise of strengthening the foundation of the economy to prepare it for accelerated planned growth of 8 per cent of GDP”, Mr P.K. Jain, President, PHDCCI said. FICCI President A.C. Muthiah said that the proposed infrastructure projects will stimulate demand and help encourage manufacturing activity in core sectors. “It is a very well conceived and progressive budget with major boost on fiscal consolidation. Reduction in excise duties will certainly create more demand”, he said. Welcoming the step to retain full tax exemption under Section 10 A and 10 B for the IT Industry, Nasscom Chairman Mr Arun Kumar said that this would help continue the growth of IT and ITES industry. He also said that steps to pre-loaded software from the purview of excise duty will help reduce software piracy in the country. Prof. J.D. Agarwal, Chairman and Director of Indian Institute of Finance said that there was a need to control subsidies on food, fertilisers and petroleum. The Indian Electrical and Electronics Manufacturers Association (IEEMA) also said that the Finance Minister had skipped out specific implications on the Electrical Industry. But focus on infrastructure would help boost demand, the Association said. Reduction in excise duty would encourage demand in various industries including Air Conditioners , said Mr R Krishnan, Chief Executive, Fedders Lloyd Corporation. Chairman of Karvy Group, Mr C. Parthasarthy said that the budget would particularly boos hotel industry, IT sector, healthcare and banking. The Union Budget will contribute towards strengthening the growth of the telecom Sector, which has witnessed major changes in recent past, Mr Ravi Sharma, MD, Alcatel said. However, Mr Ashok Goyal, MD, Spice Telecom said that the telecom industry had expected a substantial reduction in custom duties for import of capital requirements and also a further increase in the FDI cap to 75 per cent, which has not taken place.
|
|
Textile sector gets incentive, relief New Delhi, February 28 These include reduction of excise duty on polymer filament yarn from 32 per cent to 24 per cent, from 16 to 12 per cent in case of spun and other filament yarns and from 12 per cent to 8 per cent on all knitted cotton fabrics and garments, he said presenting the Budget for 2003-04. At the same time the package seeks to buoy the small and unorganised handloom and powerloom sector to benefit artisans across the country. Presenting his maiden Budget, the Finance Minister heeded to the demand of the sector, proposing rationalisation of excise duty to have a moderate rate structure and complete the CENVAT chain. Most of the measures unveiled have been made on the basis of recommendations made by the N.K. Singh committee report on textiles and the Kelkar committee report on taxes. Excise duty on garments, woven fabrics and knitted fabrics has been reduced to 10 per cent from 12 per cent. While reducing excise duty in these sectors, Mr Singh has, however, acceeded to Textiles Minister Kashiram Rana’s request to retain the excise exemption on handloom fabrics, silk, khadi and polyvastra. To encourage modernisation of textile industry, customs duty on a large number of textile machinery and their parts is being reduced from 25 per cent to 5 per cent. Customs duty on apparel grade raw wool would also be reduced from 15 per cent to 5 per cent and on paraxylene from 10 per cent to 5 per cent.
|
|
Forward-looking Budget: Mitra
New Delhi, February 28 A very well contoured Budget, the focus on infrastructure is especially encouraging as even the non-highway areas which boost agricultural processes indirectly have been taken into consideration. As specified, the fiscal consolidation is a very important aspect because states have a very poor fiscal situation and the Finance Minister has taken care of the states in terms of compensation. The Budget this time is a forward-looking one, R & D based, simplification based, people friendly and growth-stimulating through a massive infrastructure effort. Most importantly, perhaps this is the first time that such a clear focus on health, which is crucial to the human capital, has been laid. So far as the salaried class is concerned, the Budget has managed to maintain its expectations. For the benefit of the salaried class, the exemptions have been increased. Standard deduction has been increased to Rs 30,000 or 40 per cent of the salary and for incomes up to Rs 8 lakh the Budget is very positive. Even a tax-payer having income from dividends and interest will now have a general deduction of Rs 12,000. The Budget has been in favour of the salaried class. It can be said it is a realistic budget which has continuity and yet change at the same time. In the reduction of excise duty, the Finance Minister has very carefully chosen industries which are performing well, including automobiles. Even the Economic Survey 2002-03 had pointed out industries that have performed particularly well due to their internal process of change. The Budget will give a further impetus to these industries. This Budget will stimulate the GDP growth because cement, steel, pharmaceuticals, chemicals and fertilisers — all have been stimulated in this Budget and these are the core sectors. Textiles and R & D related activities have also been encouraged. ( As told to Shveta Pathak) Dr Amit Mitra is an economist and Secretary General, Ficci.
|
|
Budget progressive: chambers Chandigarh, February 28 Reacting to the Budget, Mr.S.K. Bijlani, Chairman, CII Northern Region, said,‘‘ This is a progressive and action-oriented Budget that will help the manufacturing industry to develop competitive edge. The cut in excise and customs duty and lending rates to the SSI sector and dereservation of the SSI sector will help the economy to emerge on the global platform.” Mr Amarjit Goyal, President, Punjab Committee, PHDCCI said, “Despite an adverse impact of drought and looming clouds of Iraq war, the Finance Minister has tried to put the nation on the high-growth agenda by announcing long-term correcting measures. However, efforts should be made to club the state taxes like octroi and entry tax into VAT to provide relief to the industry from day to day harassment.” Participating in the post-Budget discussion, organised by the CII, Mr Vinod Sawheny, CEO, Bharti Mobile Limited, Northern Region, said, “with the announcement of continuing tax holiday for another year, a decrease in customs duty on optical fibre and other imported inputs will help the telecom industry to grow up to 100 per cent in the coming year.” Supporting his views, Mr Ashok Goyal, Executive Director, Spice Telecom, said, “The cellular industry is in a nascent stage and the Finance Minister has taken a right step by announcing these measures.” Mr Rajneesh from the Haryana Chamber of Commerce and Industry claimed that an increase in the income tax exemption limit and cut in the lending and deposit rates would bring more money in the market and thus would boost the economy. However an increase in the burden on the farming community, by increasing urea price, would adversely affect the manufacturing and service sectors.
|
|
It’s an unconventional Budget Ludhiana, February 28 Reacting to the Budget, Mr Parshotam Lal said: “It would be unfair to call the Budget a pre-election soft Budget, several steps have been taken to boost the infrastructure development in the country”. He said care had been taken for the senior citizens by providing a special pension scheme by abolishing income tax up to Rs 1.53 lakh and accepting a self declaration on income tax. Mrs Madhu Gupta is jubilant that she would now be able to send her son to a good private school as the Budget provides tax rebate on the fee paid towards a child’s schooling. “The money my husband and I were contributing towards income tax can now be used for sending our child to a better school”, she said. Mr
P.D. Sharma, president of the Apex Chamber of Commerce and Industry, said: “This is an unconventional Budget and it would be wrong to call it populist or a pre-election Budget. The Budget has touched the issue of social and economic fabric and is favourable towards the small scale industry
(SSI), which will benefit from the reduction in interest rates”. He said the excise duty rationalisation was in order and many items, including cycle manufactured by the SSI had been exempted from excise duty. This was a welcome step, he said. Universal insurance that ensures medical aid for all at the cost of Re 1 per day has been widely welcomed. Dr Vipin Gupta, said: “Providing a health cover to all at a nominal cost is a very positive step in providing quality healthcare,” he said, adding that it would enable ordinary people to undertake specialised treatment that was earlier the privilege of only the rich. The medical fraternity too is jubilant over the reduction in import duties of life saving drugs and important medical equipment. “Once we have good equipment, the existing manpower can make India a healthcare destination of the world”, says Dr.
G.S. Grewal, a senior physician. However, there are some like Mr Roshan Lal that say that the hike in petrol, kerosene and prices of some other essential commodities are likely to affect the common man, who is not really interested in cars, air conditioners, gold or computers that are affordable only by the rich. He also said that standard deduction for salaried class up to 40 per cent of the salary or Rs 30,000 whichever is lower for income up to Rs 5 lakh also relates to the rich and not the poor or lower middle class. The local industrial units have welcomed the budget by and large. The reduction of custom duty on a large number of textile machinery that has been reduced from 25 per cent to 5 per cent to encourage modernisation has also been well received. Continuation of concession extended to IT under Section 10 A and 12 B have also been well received.
|
|
74 pc FDI cap in banks proposed
New Delhi, February 28 Further, the current restriction of limiting such investment to 50 per cent of the net worth of the Indian company will now be raised to 100 per cent. On the banking front, it has been decided to increase the cap of FDI in private banks to at least 74 per cent.
TNS
|
|
Gold tumbles
by Rs 210 New Delhi, February 28 In choppy deals, the yellow metal also dwindled in other cities dropping by Rs185 at Rs 5,550 per 10 gram in Chennai and Rs 160 at Rs 5,580 in Mumbai. Gold experienced the year’s biggest fall in a day here today following the government’s decision to reduce import duty to more than half.
PTI |
bb
Price index falls SBP branch PSB |
 |
| Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Editorial | | Business | Sport | World | Mailbag | In Spotlight | Chandigarh Tribune | Ludhiana Tribune 50 years of Independence | Tercentenary Celebrations | | 123 Years of Trust | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
In video (
