Policy activism marks Union Budget: ICC
New Delhi, Feb 28 : The Indian Chamber of Commerce (ICC) said policy activism marked the Union Budget 2013-14 that was presented by Union Finance Minister P Chidambaram in the Parliament on Thursday.
Focus on higher growth for effecting an inclusive and sustainable growth path. Planned government expenditure has registered a 29.4% hike for FY14 vis a vis FY13.
Focus on encouraging foreign investment towards containing the widening current account deficit. USD 75 billion has been allocated towards financing CAD over the coming 2 years. FIIs can now also leverage investment in Corporate & Government bonds as collateral for meeting their margin requirements. SEBI's easing of KYC norms for FIIs will also facilitate foreign investment in India.
Focus on self employment and income generation. The National Livestock mission with a capital infusion Rs 307 crore can promote community livelihood projects in the backward districts.
Supply side measures for containing food inflation. Budgetary allocation for the Ministry of Agriculture has seen a 22% hike and the Green revolution initiatives in the Eastern Indian states have received a grant of Rs 1000 crore. Rs 500 crore for crop diversification for the erstwhile leaders of Green Revolution is also a pointer towards greater sustainability.
The interest subvention for timely repayment of agri credit at 4% pa would promote better technology adoption in the sector. Rs 10,000 crore allocation for the promulgation of the Food Security Bill in FY 14 is a welcome step, however, this call for a prudent reconciliation of the fiscal burden.
Interest subvention in the home loan sector would give a fillip to the steel, cement, brick, wood, and glass industry and propel employment growth.
Hike in social sector spending with due focus on women, children, specially- abled and the elderly will help to promote an egalitarian society. National Health Mission has been awarded 24.5 % more funding as compared to the last budget. 8 Geriatrics centres are also coming up with a budgetary allocation of INR 150 crore.
The educational sector has received a 17% hike in budgetary allocation towards better skill development and human capital creation.
46% hike in rural development spending, which stood at Rs 801.94 billion, with an INR 33,000 crore allocation for MGNREGA will foster capacity creation in rural India.
RS14,873 crore allocation for the JNNURM scheme with special focus on land connectivity in the hilly states , including the NER states will foster better connectivity.
Infra debt funds, IFCL credit enhancement for infra companies, and extension of Rs 50,000 crore limit for tax infra bonds would be critical in financing the infra sector, whose funding requirements are far surpassing the paltry inflows from the banking sector.
Investment allowance of 15% for new high value investors investing Rs 100 crore on plant and machinery would help to pull in the big ticket investors.
Extension of Income limit for RGESS to Rs 12 lakhs from the erstwhile Rs 10 lakhs and Tax benefits for 3 successive years for the first time investors will increase retail participation, promote equity culture and deepen the Indian capital markets.
Policy on shale gas exploration and clearance of stalled NELP blocks will augment the long term viability of our energy security options.
Declaration of 5 inland waterways declared as national waterways would foster an affordable and eco friendly mode of bulk cargo transportation and may forge a strong link in cross border connectivity with neighboring countries like Bangladesh and Myanmar in the future. Opening of 2 new ports in West Bengal would provide a much needed fillip to the existent port infrastructure.
PPP projects with Coal India will open up a level playing field for the private players and enhance technology transfer and production efficiency.
Continuation of Non-tax benefits to MSMEs for 3 years after they graduate to the next level, would yield the much needed hand-holding support for these units in firmly entrenching their market footprint. Augmentation of SIDBI refinancing capacity by Rs 10,000 crore has also been a shot in the arm for the MSMEs. SME listing on stock exchanges without IPOs would bring in greater fund flow for the sector.
Technology upgradation fund for the textile industry (with major focus on the power loom sector), Rs 50 crore grant for the Apparel parks under SITP and Rs 96 crore awarded for interest subvention in the textile industry will help to promote competitiveness of the handloom weaves.
Standing Council of Experts will augment international competitiveness of the Indian financial sector.
Bank branches doubling up as insurance brokers would effect greater financial inclusion. A Dedicated debt segment in the exchange would help prolifer the debt market, which is currently drawing greater interest than equity.
Enlisting of Mutual fund distributors in mutual fund segment of stock exchanges would garner greater market reach and the ability of Insurance companies, pension and provident funds to trade directly in the debt segment would foster robust BFSI growth.
Introduction of core banking services for cooperative banks and capital infusion for PSU banks would help banking sector growth, with help in their adherence to international best practices like Basel III norms.
Generation based incentive for wind energy project and INR 800 crore allocation for new and renewable energy would promote green energy initiatives.
Tax credit of Rs 2000 to income earners of upto Rs 5 lakhs would help to boost domestic demand.
Tax holidays for power companies extended till FY 14 would help the power sector.
Surcharge increased from 5 % to 10 % for domestic companies whose taxable income is over Rs 10 crore per annum, the corresponding increase for the foreign companies being from 2 to 5 %. This will dampen private investment and augment cost base of opeartions.
TDS at 1% on the value of immovable property exceeding Rs 50 lakhs will adversely affect the real estate sector.
Excise duty on cigarettes hiked to 18% will affect the tobacco industry.
The 6% hike in duty on high end mobile phones would also affect industry growth.