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Friday,
March 1, 2002, Chandigarh, India  
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More reforms for farm sector
Excise duty on textile units cut
Liberalisation on CAC front in the offing
Rs 38,000 cr for power, roads, airports
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‘More khushi, less gham’ Budget proposals
a ‘mixed bag’ Disappointing, says PHDCCI
It’s a bold Budget: CII
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More reforms for farm sector New Delhi, February 28 The funds for the Rural Institutional Development Fund A new one-time settlement scheme has been proposed for small and marginal farmers and will be announced by the RBI to cover loan up to Rs 50,000. A one time settlement scheme for small loan accounts with outstanding principal balance up to Rs 25,000 is already in operation since March 31, 1998. Further, the Finance Minister has raised the target of self-help groups to 1.25 lakh from the current 1 lakh. “The target of 1 lakh additional self-help groups during the current year is expected to be achieved taking the total so far to more than 3.5 lakh covering more than 70 lakh families”, the Finance Minister said in his Budget speech. He has also increased the allocation for the Accelerated Irrigation Benefit Progamme (AIBP) to Rs 2,800 crore in 2002-03 from Rs 2,000 crore in the previous year. The allocation for agriculture has also been increased to Rs 775 crore from Rs 684 crore. “ A full review of the governance of agricultural research is also proposed so that the system can serve the new needs creatively”, Mr Sinha said. For rural roads, a further allocation of Rs 2,500 crore for 2002-03 is being made over and above Rs 5,000 crore provided so far. Further to improve rural energy situation, a new interest subsidy scheme called the Accelerated Rural Electrification Programme has been proposed to introduce involving an outlay of Rs 164 crore. The Sampoorna Grammen Rozgar Yojana , launched last year, has been extended for one more year and one more scheme, Jai Prakash Rozgar Guarantee Yojana (JPRGY), has been proposed to launch to provide employment guarantee to the unemployed in the most distressed districts of the country. A task force headed by the Minister for rural development will be set up to implement the programme. |
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Excise duty on textile units cut New Delhi, February 28 However, there was bad news for some on account of removal of excise duty concessions from certain segments like hank yarn and independent processors. Presenting the Budget, the Finance Minister said he had carved out a special package of incentives for the textiles industry in view of the challenges following phasing out of the Multi-Fibre Agreement in 2004. Many of the proposals are in line with recommendations made by the steering group on textiles headed by Planning Commission member N.K. Singh. In view of the misuse of excise exemption being given to cotton hank yarn, Mr Sinha said it would be brought under the excise net at 8 per cent. “In order to ensure that the benefit accrues only to the handloom weavers, I propose to bring hank yarn within the net of excise duty at 8 per cent, but at the same time, provide for an appropriate subsidy on the price of the hank yarn purchased by them,” the minister pointed out. The excise exemption granted to hand processing of the textile fabrics by independent processors has also been curtailed to only three processes namely — scouring, hydro-extraction and calendering. To enable the weavers to avail of the Cenvat credit scheme, I propose to allow the weavers of grey fabrics to pay excise duty on an optional basis”, Mr Sinha said adding that “I propose to extend a similar option to the knitting sector”. However, the handloom sector has remained unaffected as duty exemptions on handloom fabrics continues. The minister has gone a step further by proposing to grant exemption to handloom garments also from excise duty subject to certification by the Handloom Export Promotion Council. There is a proposal to grant exemption of excise duty on automatic shuttless loom for enabling the textile industry to modernise. “I also propose to exempt excise duty on specified processing machinery and specified silk reeling, weaving and twisting machinery”, the minister said. |
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Liberalisation on CAC front in the offing New Delhi, February 28 A suitable legislation is also proposed to be brought about in the current session of Parliament to empower the enforcement of agencies to arrest and prosecute the hawala operators and money launderers suspected to be engaged to financial transactions linked with terrorist activities. Non-resident Indians (NRIs) will be free to repatriate in foreign currency their current earnings in India such as rent, dividend, pension, interest and the like based on appropriate certification. The schemes which do not offer full convertibility to NRIs will be discontinued from April 1, 2002 and the existing balances non-resident (non-repatriable) rupee accounts will be allowed to be credited on maturity to the convertible Non-Resident External rupee (NRE) account. There will be full convertibility of deposit schemes for NRIs. The existing foreign currency non-resident scheme and the NRE scheme will continue to be repatriable. Further, Indian companies wishing to invest abroad my now invest upto $ 100 million on an annual basis through the automatic route, up from the existing limit of $ 50 million. Moreover, Indian companies making overseas investment in joint ventures abroad by market purchases may now do so without prior approval up to 50 per cent of their net worth, up from the current limit of 25 per cent. Indian mutual funds will now be allowed to invest in rate securities in countries with fully convertible currencies, within the existing limits. Earlier such investment was only permitted in ADR/GDRs issued by Indian companies in overseas markets. There is also a proposal to set up a Foreign Currency Convertible Bond (FCCB) scheme under the automatic route upto $ 50 million with a view to further liberalising the capital account transactions. |
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Rs 38,000 cr for power, roads, airports New Delhi, February 28 Plan outlay inclusive of internal and extra budgetary resources in power, roads and national highways and railways is being increased by 22 per cent, 39 per cent and 23 per cent, respectively, to a total of Rs 37,919 crore. Terming the restoration of the financial viability state electricity boards (SEBs) as the foremost challenge, the minister proposed that the Accelerated Power Development Programme (APDP) has been restructured to as Accelerated Power Development and Reform Programme (APDRP), with an enhanced plan allocation of Rs 3,500 crore for 2002-03, up from Rs 1,500 crore this year. Access of the states to the fund will be on the basis of agreed reform programmes, “the centre piece of which will be narrowing and ultimate elimination of the gap between unit cost of supply and revenue realisation within a specified time frame. A high-level monitoring group will oversee the progress of this programme and allocation for this programme will be augmented by loans on concessional terms from the Power Finance Corporation (PFC). Corporatisation of major ports
It has also bee proposed to corporatise the major ports in a phased manner. Private sector investments have been facilitated and 17 projects worth more than Rs 4,500 crore have already been approved and another eight projects worth more than Rs 3,200 crore are under consideration. The regulatory structure will also be strengthened with the corporatisation of existing ports and new private sector ports coming up. Firms participation in airports
In addition, private sector participation in greenfield airports has been sought to encourage through a package of concessions, including availability of land and related infrastructure from the state governments. Further, there will be exemption from levy of Inland Air Travel Tax (IATT) and Foreign Travel Tax (FTT) on departing passengers for projects located in states that charge sales tax on aviation turbine fuel at the Central Sales Tax rate. The proposed package also includes charging of advance development fee by way of passenger service fee at the existing airports for help in financing of the greenfield airport, levy of user development fee at the new airport and financial assistance/equity participation by the Airports Authority of India (AAI). The Finance Minister said the proposed new airports in Bangalore and Hyderabad will benefit from these concessions. An urban reform incentive fund has also been proposed to set up with an initial allocation of Rs 500 crore to provide reform-linked assistance to states. The fund will seek reforms in rent control laws and the Urban Land Ceiling Acts, rationalisation of stamp duty regimes, revision of bye-laws and municipal laws, and initiation of public-private partnership in the provision of civic services. A city challenge fund will also be set up as an incentive-based facility that will support cities to fund transitional costs of moving towards better municipal management. Issue of municipal tax-free bonds up to Rs 500 has been provided for in 2002-03, up from Rs 200 crore this year. Tourism a priority area
Tourism has been identified as a priority area and six tourism circuits would be identified for development to international standards during the year. Special Purpose Vehicles will be permitted to raise resources for infrastructure development in these circuits. The Plan outlay for tourism has accordingly been increased by 50 per cent to Rs 225 crore during 2002-03. |
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‘More khushi, less gham’
New Delhi, February 28 His 105-minute presentation of the 2002-03 Union Budget was initially delayed because of acrimony over yesterday’s Gujarat violence. In a speech, otherwise devoid of humour, Sinha brought in Bollywood while making proposals in the entertainment sector. He said film exports have been roughly doubling every year during the past three years and it was time to bring in a fiscal regime to usher in more “khushi” and take away the remaining “gham” from the entertainment industry. He was punning on Bollywood hit Kabhi Khushi Kabhi Gham. Further, he added “Filhaal, I shall have more to say on this” later. While proposing reduction in customs duty in Glucometers and test strips for diabetic patients, Sinha made it clear that he was not diabetic himself. His speech was punctuated with occasional thumping of desks from the ruling benches and at times shouts of “shame, shame” from the opposition members particularly when he announced hike in LPG and kerosene prices. A reference to disinvestment by the Finance Minister provoked an opposition member to remark “you can even sell off the government”.
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Budget proposals a ‘mixed bag’ New Delhi, February 28 Ficci President R.S. Lodha said the Budget in the Finance Minister’s own words had sticks as well as carrots. The encouraging aspect of the Budget was the emphasis on agricultural sector and the introduction of incentive schemes for the states to push reforms. The Budget has also given a new thrust on infrastructure investments and this should help corporate India to gain in competitiveness. On the negative side the industry said that the government had failed to provide a growth impetus to the economy, reeling under slowdown, while individuals have been burdened by further taxes and withdrawal of saving incentives. Bajaj Auto Chief Rahul Bajaj said the Budget was “anti-individual and anti-stock market” as a result of which commoners would have to pay more through taxes while there was no incentives for savings and investment. “This Budget is unlikely to boost higher growth rates, it may at best sustain current growth rates. I would call it an achievable, deliverable Budget,” CII President Sanjiv Goenka said. Assocham President K. K. Nohria said reimposition of dividend tax was a
retrograde step and would burden the industry. PHDCCI President Arun Kapur said the Budget had failed to announce radical measures to kick-start the economy and added that
various proposals do not give a clear picture of Government’s fiscal policy. |
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Disappointing, says PHDCCI Chandigarh, February 28 At, a special review session organised at the Press Club here today by the chambers, Mr Ashok Khanna, Chairman, the Northern Regional Development Council, said the Finance Minister has ignored the small scale industry. Mr R K Saboo, former, President said the Budget is not investment friendly and particularly disappointing for the manufacturing sector. A few steps like doing away for the seeking of IT permission for the sale or transfer of immovable property are welcome. Removal of certain knitwear from SSIs reservation will help in attracting new
investments, said Mr Satish Bagrodia, Chairman, HP Committee. Mr Vikram Sehgal, Chairman, Chandigarh Committee, PHDCCI, appreciated the rationalisation in respect of central excise and customs. Among others present the session were Mr R S Sachdeva, Co-chairman, Punjab Committee, Mr Chaman Sharma, Mr C V Goyal, Chairman, Haryana Chamber of Commerce, Panchkula Mr Gurmeet Singh, President, Mohali Industries Association, Mr Rakesh Aggarwal, Mr Kailash Aggarwal, President, Industries Association of Chandigarh and Mr R K Luther. |
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It’s a bold Budget: CII Chandigarh, February 28 In a special Budget review session organised at the CII headquarters here today, Mr R.M. Khanna, session Chairman, who heads the CII (North) Finance and Taxation Committee, said “considering the present economic and political scenario, it is a bold Budget. However, much depends upon its implementation in the right spirit”. The emphasis on agriculture, housing, textile and tourism are a welcome step. Confederation members said the northern states which are agriculture-dominated would specially benefit from the measures like increase of Nabard’s RIDF VII assistance from Rs 4,500 crore to Rs 5,000 crore and schemes for share croppers and tenant farmers. Subsidies for the construction of cold storages for perishable commodities were also welcomed. Mr Gokul Patnaik, said the announcement of increase in issue price of urea and DAP would hit the farmers in the state. On removal of restriction on inter-state movement of foodgrains, withdrawal of exports control on agro commodities, reduction in customs duty on agricultural machinery would give a fillip to the agricultural sector, the CII said. Regarding the proposal of a 50 per cent increase in plan outlay for tourism, private management of airports in metros, concessions for private participation in green field airport projects, etc, the members said these steps would be helpful to Rajasthan, Himachal Pradesh, Uttaranchal, UP and J&K which are important tourist destinations. The CII also welcomed special package for the textile industry and excise exemption for handloom and garments. “The Finance Minister has well addressed this sector and the announcements will encourage investment,” said Mr Manish Bagrodia, MD, Winsome Yarns. Measures like permission to mutual funds to invest in companies abroad and encouragement to joint ventures abroad would take the country on path towards capital account convertability, said Mr I.S. Paul, MD, Drish Shoes. However, on the manufacturing sector, CII said the Budget has failed to address the prime issue of prevailing recession in the industry. “The industry is looking forward to certain fiscal incentives to encourage investment allowance, reduction in the corporate tax rate and elimination of MAT,” said Mr Sanjiv Goenka, CII President. While withdrawal of 2 per cent earthquake surcharge (Gujarat) was a welcome measure, imposition of 5 per cent surcharge on tax would dampen corporate and investor sentiments. |
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