The three apex industry chambers ""- the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce & Industry (Ficci) and the Associated Chambers of Commerce & Industry (Assocham) ""- have unequivocally welcomed the Union budget for 1997-98 and complimented the government for presenting a budget aimed at putting the economy on a growth track.
Ficci has stated the budget is a growth oriented one, investor friendly, progressive and forward looking. It does not have a parallel in the recent past.
The CII has complimented Union finance minister P Chidambaram for exhibiting a fine combination of vision, skill and pragmatism and added that the budget is a growth-oriented one with a focus on social justice.
Assocham noted that despite the limitations of a coalition government, the finance minister has been able to initiate measures aimed at getting the economy back on the rails.
CII president Shekhar Datta said P Chidambaram has shown courage, pragmatism, ambition and decisiveness while launching the growth-oriented budget.
The strong positive signals unleashed such as reduction in corporate tax to 35 per cent from 40 per cent, removal of surcharge and removal of double taxation on dividend income are sure to boost investment and output and pep up the deceleration in industrial growth which industry is currently witnessing, Datta said.
Datta added that the depressed capital market would get a kick-start with the novel measures initiated in the budget such as buy-back of shares, relaxation of inter-corporate loans and investments, review of Fera and relaxation of FII investments.
Assocham president H L Somany welcomed the measures announced and complimented the finance minister for pegging the fiscal and revenue defcits at 4.5 per cent and 2.1 per cent of the GDP respectively.
Commending the finance minister's steps to widen the tax net, Somany said the affluent farming community could have been brought under the tax net.
Ficci president A S Kasliwal said bringing down the personal and corporate income tax, abolition of corporate surcharge, modification of MAT, replacement of Fera with the Foreign Exchange Mangagement Act and laying down the foundation for convertibilty of rupee under the capital account are the positive factors of the budget.
Kasliwal said Ficci is happy that the government has accepted the suggestions of industry and many of these have got reflected in the budget.
This new partnership and dialogue between the government and industry will fructify in the years to come, Kasliwal said.
Shekhar Datta said: The strengthening of the national insurance companies ""- LIC and GIC ""- will enable them to face competition. The opening up of the health insurance to joint ventures is a step in the right direction. The measures have laid the ground for opening up of the insurance sector.
Datta said CII was happy to note that the budget gives adequate attention and recognition to the critical infrastructure sector by the extension of tax holidays, facilities to import at concessional rates for the tourism industry and incentives for oil explorations.
CII said it strongly supports the higher allocation for social infrastructure such as education and health. The review of the Minimum Alternate Tax (MAT) and the exemption of the exporting community from the purview of MAT, the proposed scheme to set off against advanced tax is welcome and boost the corporate sentiments and the stock market, Datta said. CII believes the budget will see the sensex zooming.
Somany regretted that MAT, which is the single factor which has contributed to the slow down in industrial growth, has not been abolished. Datta noted, The move towards simplification and rationalisation of customs duty marks a continuation of the reform process initiated in 1991.
Datta expressed doubts on whether in view of the past track record, the voluntary disclosure scheme would bring unaccounted black money into the system.
