 |
|
FM admits failure on power front
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Budget goes soft on plane lease rentals
Tourism gets Rs 830 cr
Rs 16,901-cr equity support for PSEs
Lakshmi Mittal to get Eisenhover Award
TDS defaulters to be penalised
Himalaya to foray into Saudi Arabia, Jordan
CPI-IW at 549 pts
|
|
An equal mix of cheers and tears in Budget
New Delhi/Mumbai, February 28 “The Union Budget for 2006-07 has sought to lay the foundation for the country to achieve 10 per cent growth in next two-three years,” observed FICCI President Saroj Kumar Poddar. Appreciating the simplification of FBT, he said, on the tax front major reforms have been initiated both in direct and indirect taxes. The reduction in peak customs duty from 15 per cent to 12.5 per cent is step that would align our rates with those of Asean countries, he said. “The industry will be happy as there are no major negatives. It has cut down customs duty and has covered lot of industries as well,” CII chief mentor Tarun Das said immediately after presentation of the Budget. Mrs. Sushma Berlia, President, PHDCCI said that while the enhanced allocation to various social sectors, selective infrastructure development, policy pronouncements about mining, power and coal, agriculture, containing fiscal deficit are commendable features, the Finance Minister is unfortunately looking at tax GDP ratio with only central taxes in mind. The total tax burden of Central and State taxes and levies which is around 20 per cent is quite significant and should not be more than 18 per cent. Not much has been done by way of expenditure control by removal of non-merit subsidy and reforms in government administration. A number of schemes have seen a rise in expenditure. Ironically, these may not even reach the intended beneficiaries. Indeed, more schemes have been added, said Mrs Berlia, but inadequate attention has been paid to social sectors like education and health. Mrs Berlia said that the chamber welcomes the announcement of a road map for the implementation of Goods and Services Tax from 1st April 2010. The country’s gem and jewellery trade has welcomed the Budget proposals which sought to set up an expert committee to suggest ways and means to expand trade. “This committee is expected to rationalise taxes and streamline rules,” said Mr Bakul Mehta, Chairman of the Gem & Jewellery Export Promotion Council in Mumbai. The government today decided to set up an expert body to study the gems and jewellery sector and related tax practices in India and abroad. The tea companies are likely to benefit from the Budget proposals, Mr Percy T Siganporia, Managing Director, Tata Tea, said here today. He added that the decision to invest an equivalent amount of Rs 100 cr by the government in the Special Purpose Tea Fund set up for replanting and rejuvenation incentives would favourably address the viability of tea plantation operations. The continued emphasis on farm credit and special new Nabard credit line for self-help groups would encourage entrepreneurship for the unemployed at the tea estates. This would generate business/employment opportunities consequently reducing corporate social cost burden, the statement said. Mr Ajay Shriram, President of CII, Northern Region, said that the Budget has set the path for inclusive growth to boost employment generation. The Budget is a continuation of the growth-oriented measures announced in his previous two Budgets that aim to make India a global manufacturing hub. Mr Partap Aggarwal, CEO, IDS, Mohali, said that today’s Budget has ensured that domestic software industry will get a boost. “There is need to support the knowledge based industry. Education is being given priority, ITIs are being upgraded — which will lead to a boom in IT industry as they get trained manpower,” he said.
|
|
Pharma units sore, SMEs ignored
Chandigarh/New Delhi, February 28 Most of the Small and Medium Enterprises (SME) in the region feel that the Budget did not contain any policy framework, which would have made an impact on the national and industrial growth. Mr Amarjit Goyal, Chairman of PHD Chamber of Commerce and Industry and Chairman of Modern Steels Limited, said that the proposal to again impose import duty on steel melting scrap from zero per cent to 5 per cent, and reducing duty on alloy steel and primary and secondary non-ferrous metals from 10 per cent to 7. 5 per cent, would lead to a hike in steel prices from Rs 800 to Rs 1,000 per ton. His views were supported by Mr Ashok Khanna, Director, Ansal Housing and Construction Ltd., and Chairman of Khanna Watches. “SMEs constitute a major share in the over all production and nothing has been done for their growth. Important sector like pharmaceuticals, textiles, engineering, electronics, and auto-spare parts have not been taken care and left aside,” he added. Mr S P Gupta, Director in Liberty Group, rued that the Finance Minister failed to increase limits for excise from Rs 1 crore to Rs 3 crore. “The SSIs in Haryana have already been reduced in number from 1. 25 lakh three decades ago to 80,000 now. By ignoring this sector, the government has failed to give the much needed fillip to industrial growth,” he said. Increase in the service tax would further burdened the SMEs, he added. The Union Budget 2006-07 has not provided any incentives to R&D, technology licensing and indigenous drugs in the biotech-pharma sector, biotech entrepreneur Kiran Mazumdar-Shaw said today at Bangalore. For biotech-pharma space, she said the Budget has “neutral impact” despite customs duty reduction on anti-AIDS, anti-cancer and life-saving drugs. There are no perceived benefits for indigenous manufacturers. “However, no benefit for R&D-led pharma-biotech companies.” Ranbaxy CEO Manvinder Singh said: “Pharma sector has been considered in bits and pieces. Reduction in excise duty on anti-AIDS and anti-cancer drugs is a good step.” Cigarette majors ITC and Godfrey Philips also came down heavily on the government for increasing the excise duty on cigarettes and said the 5 per cent hike should have been made applicable to the entire tobacco industry. “Why should cigarettes be singled out for excise duty increase... All forms of tobacco products should be brought under excise duty,” ITC Chairman Y.C. Deveshwar said. He said other forms of cigarette consumption, like chewing or ‘beedi’, should also have been covered under the excise duty hike. Echoing similar views, Godfrey Philips’ Ram Poddar said that prices of cigarettes could go up because of the government’s decision. “It is not a progressive measure,” he said, adding that it could cause an additional burden of Rs 350 crore on the cigarette industry. The Commodity Exchanges were also disappointed over the Union Budget, which they said, have not earmarked any incentives for development of commodities futures market on lines of the securities market “We expected the Union Budget to give infrastructure status to commodity exchanges which was not done,” Multi Commodity Exchange of India Limited MD and CEO Jignesh Shah said. National Commodity and Derivatives Exchange Chief Economist Madan Sabnavis said that Budget is silent on FII investment in commodities futures market. Industry captains were also disappointed over the absence of any announcements in high growth areas such as retail. “Overall it is a bit of disappointment,” UTV CEO Ronnie Screwala said.
|
|
FM admits failure on power front
New Delhi, February 28 However, the decision of hike in LPG prices has been deferred, while partly implementing the recommendations of Rangarajan Committee on Petroleum sector by increasing cess on domestic crude oil to Rs 2,500 per tonne. While sharing the responsibility of failure in power sector, he blamed the previous NDA government for fall in generation. “It is right that as against 41,000 MW power generation targets during the 10th Five Year Plan, we would be able to add maximum 34,000 MW by 2007. But the responsibility must be shared by the previous NDA government, which remained in power during the first two years of the plan,” he told mediapersons during his post-budget press conference. Power generation in 2005-06 has so far shown a modest growth of 4.7 per cent because of shortage of fuel, mainly LNG and coal. The GDP losses are estimated to be around 300,000 crore due to shortfall in power. With a view to meet the growing needs of the ever-expanding thermal power sector, the government today said it would open up to 20 billion tonne-capacity coal reserves for thermal power projects after 2012, till when it has reserved the blocks for Coal India Limited. The Finance Minister said, considering the shortfall in generation targets, Ministry of Power has invited bids for five ultra mega projects of 4,000 MW each, which would be awarded by December 2006. He said about 39,500 MW capacity would be added in next three years, including 33,000 MW in public sector. Of these, about 15,000 MW will come on stream by March 31, 2007. On LPG prices, he said, “Our decision to hike cess on domestic crude from Rs 700 per tonne cess to Rs 2,500 per tonne, will partly meet the subsidy on LPG and kerosene and I will work hard for Parliament consensus on the issue of petroleum, food and fertiliser subsidies.” The minister, however, did not announce any financial package for the oil marketing companies, who are facing problems due to huge rise in under-recoveries. The hike in cess will provide an additional Rs 2,150 crore to the national exchequer, which will be utilised to meet the subsidy burden arising from the losses incurred by Oil companies on the sale of LPG and kerosene. The increase in cess will affect ONGC and other upstream companies, which have not been allowed to raise prices. India’s largest crude oil producer will have to shell out about Rs 1,600 crore more to the Government as a fallout of increase in cess on domestic crude oil. Dr C Rangarajan has recommended a hike in the cess to Rs 4,800 per tonne, to partly finance the under-recoveries by the oil marketing companies on the sale of four major products including LPG and kerosene. The Government has decided to continue subsidy on LPG and kerosene in 2006-07.
|
|
|
Budget goes soft on plane lease rentals
New Delhi, February 28 For the aviation sector, the budget proposals also include a 12 per cent service tax on international air travel for business and first class passengers. Clause 15A of Section 10 provides for exemption from income tax of lease payment received in respect of a lease of an aircraft or an aircraft engine by the government of a foreign state or company from an Indian company. The withholding tax exemption available on lease rentals paid to foreign companies effectively works out to about 20 per cent and increases the cost of leasing to that extent. The Finance Ministry has continued with the exemption to facilitate public sector carriers Air-India and Indian to complete their lease agreements. Several airlines have been complaining that they have not been able to complete their leases since aircraft are not available in the international market. Lease rentals have gone up and the withholding tax would have only added to costs.
|
|
|
Tourism gets Rs 830 cr
New Delhi, February 28 “Foreign tourist arrivals increased to 3.92 million in 2005. It is still a fraction of India’s potential,” Finance Minister P Chidambaram said. Plan allocation of Tourism Ministry was increased from Rs 786 crore to Rs 830 crore. Besides taking-up 15 tourist destinations and circuits for development, the government will also identify 50 villages with core competency in handicrafts, handlooms, and culture, close to existing destinations and circuits, and develop them for enhancing tourists’ experience. To give more professional touch to the hospitality in tourism sector, the government will also establish four new institutes of hotel management in Chhattisgarh, Haryana, Jharkhand and Uttaranchal.
|
|
Rs 16,901-cr equity support for PSEs
New Delhi, February 28 Presenting the Union Budget 2006-07 in the Lok Sabha today, Finance Minister P Chidambaram said the government has in the past two years infused Rs 1,180 crore in cash and made non-cash sacrifices of Rs 2,566 crore to re-structure 10 PSEs, including Indian Telephone Industries Ltd and Heavy Engineering Corporation Ltd. Meanwhile, the government has a target of Rs 3,840 crore for disinvestment from the public sector in 2006-07, the Finance Minister said. The target did not figure in the Budget speech as the amount would not go to the consolidated fund and help reduce fiscal deficit, but to a special fund meant for social sector schemes, the minister told reporters. The Finance Minister also proposed a number of steps in the Budget to broaden and strengthen the capital market. Outlining the details of the proposals, Finance Minister P Chidambaram said the limit on FII investment in government securities would be increased from $1.75 billion to $2 billion and the limit on FII investment in corporate debt from $0.5 billion to $1.5 billion. The minister also announced that the ceiling on aggregate investment by mutual funds in overseas instruments would be raised from $1billion to $2 billion and the requirement of 10 per cent reciprocal share holding would be removed. The state-owned banks can breathe easy now, as Finance Minister today announced conversion of 'special securities' totalling Rs 22,808 crore into tradeable securities and enable them to lend more to productive sectors. Mr Chidambaram also promised to come up with a comprehensive Bill on insurance and push ahead Bill aimed at banking and pension reform. On measures to push up credit, he said the capital infused in state-owned banks in 1993-94 by way of non-tradable special securities could now be converted into tradeable SLR bonds. The government had issued special securities worth Rs 16,809 crore in 1993-94, whose value had grown to Rs 22,808 crore. Meanwhile, the RBI has asked the Regional Rural Banks (RRBs) to prefer offering credit to customers for various purposes, except speculative activities against the security of hallmarked gold jewellery, to ensure good quality gold in the long-term interest of the consumers. ''Preferential treatment of hallmarked jewellery is likely to encourage practice of hallmarking which will be in the long-term interest of consumer, lenders and the industry,'' a RBI notification said. India's long-cherished dream of manufacturing semi-conductors and other high technology IT products could well become a reality, with the IT Ministry set to announce a policy in this regard shortly. "With an objective of making India a preferred destination for the manufacturing of semi-conductors and other high technology IT products, including wafer, Assembly test and manufacturing of semi-conductors, flat LCD/OLED/plasma panel displays and storage devices, the Ministry of IT will announce a policy shortly", Mr Chidambaram said. Providing a relief to the makers of synthetic textile yarn, he announced a cut in excise duty on man-made fibre and filament to 8 per cent from 16 per cent in the Budget. The Budget today gave a major fillip to the food-processing industry by creating a Rs 1,000 crore corpus for refinancing loan, besides exempting condensed milk, ice cream, pasta, yeast, pectin and processed meat, fish and poultry products from excise duty.
— Agencies
|
|
Lakshmi Mittal to get Eisenhover Award
London, February 28 Announcing this, the Business Council for International Understanding, a non-profit making US business association dedicated to forging relationships and promoting dialogue between business and government communities across the globe said “Mittal has transformed the fragmented steel industry into a global force for good in communities worldwide.” The award will be presented at BCIU’s Annual Opera Gala at the Metropolitan Opera House at Lincoln Center in New York City, tentatively scheduled for Fall 2007. Meanwhile, Mittal Steel has ruled out raising the price on its $23 billion takeover bid for Arcelor as it prepared to present its case to angry European governments. — PTI, AFP
|
|
TDS defaulters to be penalised
New Delhi, February 28 No penalty was so far specified under the Income-Tax Act for failure to collect tax at source. A new Section 271CA has now been introduced in the Act so as to provide for imposition of penalty on any person concerned who has failed to collect tax at source. "Such penalty is proposed to be a sum equal to the amount of tax which he failed to collect at source," the Memorandum Explaining the Provisions in Finance Bill, 2006 said. No penalty shall be imposed if the person concerned proved there was a reason for his failure to collect tax at source. The order of penalty is proposed to be made an appeallable order. This amendment would take effect from April 1, 2007, and will, accordingly, apply to the assessment year 2007-08 and in subsequent years.
— PTI
|
|
Himalaya to foray into Saudi Arabia, Jordan
Bangalore, February 28 "Our entry into Saudi Arabia is scheduled for this month. We also plan to make a foray into the market in Jordan and Lebanon", company President and CEO Ravi Prasad said. He said the company was also looking at Russia for launching its therapeutic, personal care and wellness products.
— PTI
|
|
CPI-IW at 549 pts
Shimla, February 28
|
bb
Economy grows Power project |
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
