Raipur, February 28, 2011
Calling the Union Budget 2011 proposals inadequate the state BJP President Shri Ramsewak Paikra said, “The proposals made by the Finance Minister are insufficient to meet the challenges and demands of the Indian economy which needs more emphasis and budgetary allocations in key segments like agriculture. The Centre has also neglected impoverished class in its budget.”
Highlighting the need for cheaper loans to farmers he said “Although the FM has increased the interest subvention to farmers from existing 2 percent to 3 percent which brings down the effective interest rate to 4 percent but the Budget has made this applicable only on crop loans. It has been our long standing demand to give loans to farmers at 4 percent interest rate. The Farmers Commission headed by Dr. MS Swaminathan has also recommended for it, therefore this provision should not be implemented in a patchy manner. He should have included other agriculture related activities like purchase of implements and other goods under this interest subvention provision. Also he should have extended this benefit to larger number of farmers rather than focusing only on those farmers who are easily getting institutional credit.”
“When agriculture in India is in dire straits the Government should have come up with a generous budgetary support and allocation to address the issues adversely affecting the sector. Unfortunately the Budget 2011 has not delivered on this front even after recognising the problems faced by the sector,” said BJP general secretary Shivratan Sharma.
“The Government could have helped the aam aadmi if it had increased the tax exemption limit to Rs 2,40,000. But the Government has increased the exemption limit only to Rs1, 80,000 which is nothing but a token relief to the tax-payers of the country. In an inflationary environment where double digit inflation is putting tremendous pressure on aam aadmi this token relief is nothing but a cruel joke,” said the Bharatiya Janata Yuwa Morcha state president Anurag Singhdeo and other office-bearers.
It is growth-oriented Budget: Congress
Raipur, February 28, 2011
The state Congress has termed the Union Budget as growth-oriented and positive. The PCC spokesperson Ramesh Varlyani said, “The Finance Minister(FM) had been able to come out with a growth-oriented budget even as he gave due attention to social welfare plans. The budget is the most people-friendly with special emphasis on agriculture which is the need of the hour as the country’s economy primarily remains agrarian. This Budget had set tone for a vibrant economy.”
Hailing the reduction in the fiscal deficit from 5.1 per cent to 4.6 per cent in the current financial year, he said the state Congress was confident that the budget will set pace and for double digit growth in the country. “Under the current circumstances we could not be having a better budget than this as every sector has been dealt with efficiently and properly,” he said.
He thumped the FM for taking positive steps for reducing wastage and cutting costs to cool down food inflation. “Granting infrastructure status to cold storages was good decision to this end,” he said.
“The 23.3 percent increase in infrastructure outlay and an additional Rs 30,000 crore tax free bonds issue are encouraging and are well supported by the extension of Rs 20,000 deduction for investment in Infrastructure bonds,” he said.
"Many important buttons have been pressed – long term debt funds for infrastructure, agri infrastructure, urban transportation, excise exemption for equipment and supplies to Ultra Mega Power Plants (UMPPs) and a comprehensive national policy soon for PPP," he said.
“The hike on export duty on iron ore fines and lumps to 20% ad valorem is most welcome. I am sure that this will lead to greater value addition at home and encourage the domestic steel industry,” he said.
“The FM’s support for start and completion of the National Knowledge Network of 1500 top institutes within 2011-12 is very welcome,” he added.
“The increased allocation to the infrastructure, housing and agriculture sectors would significantly boost the demand for commercial and off-the road vehicles,” he said.
He also said that the mission for electric and hybrid vehicles may bring about acceleration in the mainstreaming of these technologies. “Import duty reduction on parts for green vehicles would help,” he added.
It is an unimaginative budget: NYC
Raipur, February 28, 2011
The National Youth Congress (NYC) says that the Union Budget is a document without a vision. “There is no big idea, which has guided and motivated the Budget presentation exercise. It is an unimaginative budget, which has little nexus to the issues confronting the Indian economy,” said NYC city president Arvind Jain. “The Finance Minister has merely utilized the expanding base of the Indian economy to marginally increase the allocations for different departments/schemes. On the taxation front, he has presented a near revenue neutral budget by reducing direct taxes marginally and increasing the indirect taxes,” he said.
“Inflation is one of the most serious issues confronting the Indian economy. Food price inflation has adversely affected the common man. Except for a routine monetary exercise of increasing the interest rates and curbing the money supply, the government has no idea as to how to deal with the issues. Both in terms of agriculture and manufacturing, expanding productivity does not appear to be an imperative,” he said.
“Increased interest rates in the long run will only make the Indian economy non-competitive in the global context. It will also hamper the manufacturer sector, which is extremely important for creating new avenues of employment, particularly in view of the under-employment in the agriculture sector. The government’s figures of reducing fiscal deficit, last year from 5.1 percent to 4.6 percent was based entirely on the amounts realized from 3G spectrum auction,” he said.
“If the Prime Minister’s theory of spectrum not being a revenue raising exercise but merely a tele-density exercise for the 2G spectrum had been accepted in the 3G spectrum, even this would not have happened. In the absence of such a facility available next year reduction of the fiscal deficit appears to be more challenging,” he added.
The Chhattisgarh State Committee of Centre of India Trade Unions (CITU) said the budget gives no impetus to job creation. “In the absence of expansion of the manufacturing sector, high employment opportunities are not likely to generate. The 8.6 percent GDP growth rate is essentially on account of 9.6 percent growth in service sector, in which the government has minimal role. The manufacturing growth is declining. It is a cause for concern,” it said.
“The 5.4 percent growth in agriculture is an optical illusion since the 2009-10 agriculture growth was lower on account of uneven rainfall. Thus, in a normal agriculture productivity year following a low productivity year the percentage increase contributes to the larger GDP growth without it having an impact on the economy,” the CITU added.
“It is a heartless Budget in as much as it increases healthcare cost in India. Public health care is overcrowded and inadequate. It is essentially meant for those who are unable to afford private healthcare. To make private healthcare costlier by inclusion in the service tax is a cause for serious objection. Tourism is huge employer of manpower across the world,” it said.
“India has yet to realise even a fraction of its tourism potential. The rich pay for Tourism and others get employment. The Indian tourism industry, compared with its global counterpart, is already costly. This Budget will make it increasingly non-competitive,” it further added.
“The casualty in this year’s Budget is infrastructure creation. Roads, highways, ports, power sector has suffered immensely during the present regime. One expected bigger ideas from this government to incentivise the public private partnership to give impetus in these areas. Regrettably, nothing has been done. This renders the present budget essentially as a packaging exercise, where the expenditure entries could be made by the expenditure secretary and the revenue collection figures could be dictated by the revenue secretary. The political leadership, which was required to give a vision to this budget appeared to be lacking,” it said.
No cheers to common man: CPI(M)
Raipur, February 28, 2011
The Communist Party of India (Marxist) said that the Budget do not offer cheers to the middle classes, salaried employees and others. “The nominal increase of the tax exemption from Rs. 1,60,000 to Rs. 1,80,000, at best, brings Rs. 2,000 per year tax rebate to this category. This is more than offset by the inflation, rise in food prices, and various other increases influenced by the proposals contained in this budget,” said Dharmraj Mahapatra, the secretary CPI(M).
“The global oil prices are rising. The increase in oil price is creating a dual burden on the consumers. He has to pay for the cost of crude oil. Additionally, he has to pay for the ad valorem duty. There is a strong case for replacing ad valorem duties with specified duties so that every time the crude price rises the consumer does not have to pay higher taxes for the increase. We did not expect the government to profiteer out of oil price increase. We will continue to press for rationalisation of duties in relation to petroleum products,” he said.
“The Economic Survey and the Budget amply clarifies that the food grain stock of 46 million tonnes, which is twice the storage capacity. The government is accountable for the fact when the food prices were rising, why was this stock not offloaded and allowed to rot,” he said.
“This Budget was also expected to address the evil of Black money, which has corrupted even India’s polity. Unfortunately, nothing has been done in that direction. Sucking black money out of the system would also reduce the additional liquidity for this colour of money from the market. Sectors, which are responsible for generating excessive black money had to be looked into and remedial measures found. The Finance Minister has ignored the extent of the problem that is eating into the very vitals of the Indian economy,” he said.
Union Budget 2011 highlights
Raipur, February 28, 2011
Tax
The budget provides tax relief to the common man more or less on the expected lines. The exemption limit for general category of individual tax payers has been increased from Rs 1.60 lakh to Rs 1.80 lakh giving uniform relief of Rs 2000. The additional deduction of Rs 20,000 under section 80CCF, introduced in the last budget for a year has been extended by one more year. The finance minister could have increased the rebate here and provided much needed funds for the infrastructure sector. The Union Finance Minister (FM) has also provided for 1 % subsidy on low cost housing loan up to Rs.15 lakhs, where the cost of the house does not exceed Rs 25 lakh. In addition, the exemption limit for Senior citizens has been enhanced from Rs 2.40 lakh to Rs 2.50 lakh. Moreover, the qualifying age too has been reduced from 65 years to 60 years. For very senior citizens i.e. 80 years and above, the exemption limit has been enhanced to Rs 5 lakh. However, where on one hand the FM has given direct tax relief of Rs 11,500 crore, on the other he has announced tax clawbacks of Rs 11,300 crore in indirect taxes.
Infrastructure
The FM expects Indian economy expected to grow in the range of 8.75-9.25% FY12. This means continued growth momentum in the infrastructure sector in terms of order inflows. However, execution challenges, rising input cost and interest rate scenario continue to remain a concern and will continue to drive the financial and stock performance. Indian infrastructure companies have been lagging behind investors' expectations for quite some time as their financial performance have been affected by slowdown in order inflows, delays in execution, challenges in getting financial closure, environment clearance and land acquisition. All this has led to lower than expected sales growth for the past few quarters. Further, profitability has been impacted by rising input costs and interest rates. While key issues related to land acquisition, environmental closure and rising interest rates are outside the purview of the Budget measures, the FM has somewhat tried to meet financing needs of the companies in the sector. The Union government's target for spending Rs 2.14 lakh crore in the infrastructure sector, accounting for about 48.5% of Gross Budgetary Support of total plan expenditure and announcement of disbursal of loans worth Rs 20,000 crore by Indian Infrastructure Finance Company Limited (IIFCL) are much needed incentives for the infrastructure sector.
Steel
The steel industry cheered 20 percent export duty hike on iron ore in the FY12 federal budget that will help contain escalating raw material costs and gave a thumbs-up to higher infrastructure spends, which will boost steel demand in the country. Steel makers have been reeling under margin pressure on rising input costs led by recent supply disruptions due to floods in Australia, a leading exporter to global markets. Higher export duty on iron ore has been a long pending demand of the steel industry and the budget has taken care of the issue. The increase in export duty on iron ore will increase its availability in the domestic market, thereby stabilising price and helping domestic steelmakers.
Gem and jewellery sector
The budget failed to address much of the expectations of the gem and jewellery sector, which is a major contributor to India’s exports. Much to its disappointment, the Budget failed to make good on any points on the industry’s wishlist.
The one major setback was the re-introduction of excise duty on branded jewellery albeit of 1% this time. Earlier, the 2% excise duty on branded jewellery was abolished after the industry had registered their protest and gone through lengthy negotiations with the government.
Automobile
The Budget is rosy for the electric and hybrid vehicle space as a slew of measures to reduce the overall cost of electric and hybrid vehicles along with popularising them kicks in. One such measure is the adoption of many smaller cities as EV cities. Through this, the government will earmark many tourist towns which will use electric and hybrid vehicles for transport of tourists. Along with this, hybrid cars being manufactured in India will be incentivised with an excise duty cut of 5%. Hybrid car part imports also will be exempted from the regular custom duty of 10%. That essentially translates to cheaper spare parts for the likes of the Toyota Prius Hybrid and the Honda Civic Hybrid. Hybrid conversion kits, which will enable conventional cars to be converted to hybrid cars will also see a see the excise duty being cut from 10% to 5%. Going forward, such kits will thus get cheaper hence making hybrid conversions cheaper. Also, replacement batteries for EVs get cheaper as the central excise duty and the basic custom duty stands waived. Hydrogen powered vehicles also will get a straight 10% waiver on the excise duty front. With these measures, the Indian government hopes that more fuel saving and environment friendly hybrid vehicles will be sold and manufactured in India.
No comments:
Post a Comment