Kolkata, Jul 10 UNI | 20 days ago

The Indian Chamber of Commerce (ICC) feels that the Union Budget 2014-'15 is an inclusive , pragmatic and progressive budget.

Push to FDI in Defence and Insurance, special focus on developing 100 Smart Cities, Agri Infrastructure, tourism infrastructure, national waterway, warehousing capacity are some major diligent steps that will lead to greater investors confidence and boost up economy's growth - feels the Chamber.

In his maiden budget, the Finance Minister has been able to lay down measures that have been quite well-received by the Industry. Though big-bang measures or structural reforms which the Industry was ideally looking forward to, have not been brought in, the Budget looks like a balanced and pragmatic one with a focus on key areas, ICC said in statement

The Budget aims to revive dwindling investors' confidence and address societal issues with equal weightage. While the Budget has set the target of achieving a growth rate of seven-eight per cent in next three to four years and targets a Fiscal Deficit of 4.1 per cent in current FY and 3.6 per cent in next FY, a number of steps have been initiated to revive the beleaguered economy, societal issues like skill development for youths, gender equity, women safety, hygiene and sanitation have also got their right share.

The FDI regime has received a boost with the caps in Insurance and Defence raised to 49 per cent from the current 26 per cent in both cases. Special thrust has been given on Rural and Urban Infrastructure - ICC welcomes the Rs 7,060 crore allocations for development of 100 smart cities.

Linking the smart cities with the proposed industrial corridors will offer scalability to the MSMEs that will push them to the next growth loop. The Rs 100 crore allocation for the urban metro projects is a welcome initiative.

Government's commitment to provide 24*7 power supply is a laudable initiative with Rs 500 crore allocation for rural power supply. National Housing Banking Programme for developing rural household with allocation of RS 8000 crore, National Drinking Water Scheme for 20,000 Households affected with contaminated drinking water, strengthening broadband connectivity in rural areas and allocation of Rs 1000 crore for rural governance are other laudable schemes initiated by Finance Minister in this budget.

A corpus Rs 50,000 crore has been allocated for urban infrastructure funding. By 2019, every household is aimed to have its own sanitation facilities under Swach Bharat Yojana.

Allocation of Rs 1000 Crore for irrigation tracts, Rs 100 crore for Agri Infra Fund, Rs 200 crore for Agricultural universities and National Adaptation Fund for climate change indeed reflects Government's commitment to sustain agricultural growth at four per cent.

As the nodal Chamber of Commerce for the North East of India, the ICC is especially happy to see the special attention that has been given towards the development of the North East region in this Budget. Rs 100 crore allocated for developing organic farming in North East Region will be instrumental in developing the region as an organic hub of the country which shall further needs to be promoted as an international business centre for organic cultivate among ASEAN, Europe and USA.

Special Funding of Rs 1000 crore for developing rail network in NER over and above interim budget will go a long way in bridging infrastructural gap and connecting the landlocked region to mainland. ICC welcomes Investment in NHAI and state highways to the tune of Rs 37,887 crore, including a Rs 3000 crore corpus for the North East.

ICC welcomes the Union Budget 2014-15 target of reining in the fiscal deficit at 3.6 per cent of GDP for FY 15-16. However, the chamber calls for a clearer picture of the revenue generation route for supporting the same in view of the current tepid growth prospects, with revenue deficit being projected at 2.9 per cent of GDP. The Chamber urges for more clarity on the GAAR.

ICC welcomes the government commitment on introduction of GST by the year end. However, in the absence of a clear cut commitment from the Centre towards fully compensating the states for the projected revenue loss from transition to the new regime, ambiguity about the implementability of the deadline remains.

Overall, the ICC feels the Union Budget 2014-'15 will play a role in boosting growth and manufacturing, and will be able to set the path for further fiscal prudence and consolidation. Agriculture, Education and Health will also receive the necessary push forward.

(Posted on 10-07-2014)