Budget positive, sound in economics: Assocham
Mumbai, Feb 28 : Industry lobby Assocham Thursday welcomed the union budget 2013-14, saying it will promote investments and savings, give a boost to the infrastructure sector and skill development, and restore fiscal discipline.
"The budget will revive the manufacturing sector which had come under stress. The biggest takeaway for the sector is the investment allowance. Besides, the boost to the infrastructure sector in terms of raising of the limit for tax free bonds to Rs.50,000 crore for 2013-14 will have a positive spillover for the overall economic growth," said Rajkumar Dhoot, president of Assocham (Assosciated Chambers of Ciommerce and Industry).
He complimented Finance Minister P. Chidambaram for belying apprehensions of a pre-election populist budget and instead coming out with one which was "sound in economics".
"You require political courage to mobilize additional tax resources equivalent to Rs.18,000 crore in an election year. P. Chidambaram has done it despite pressure of the coalition politics," Dhoot said.
He said by sticking to the fiscal deficit target of 4.8 percent for the financial year 2013-14 and keeping the gap at 5.2 percent takes away one of the biggest worries which was looming large over the public finance.
"The global rating agencies which had flagged red herring over the country's public finance will take note of the sincerity with which P. Chidambaram is trying to restore the fiscal discipline," Dhoot said.
The chamber said the finance minister by promising inflation indexed saving instruments made a sincere effort to reverse the trend of slowdown in the savings rate.
The budget had several pluses for the micro, small and medium enterprises (MSMEs) as was reflected in doubling of the re-finance funding of Small Industries Development Bank of India (SIDBI), the industry lobby said.
About the so-called super rich tax surcharge, Dhoot said "the industry can live with it as the finance minister has promised that these are the short term measures taken in the wake of difficult fiscal situation".
Assocham urged Chidambaram to re-visit the personal tax exemption limit and give some benefits to the salaried class people as the measure would leave more money in the hands of consumer and revive economic demand, though several steps announced in the area of agriculture and rural development would help resurrect the economic activities in the hinterland.
Assocham lauded other proposals in the budget with strong social dimensions, like doubling of the outlay for the Jawaharlal Nehru National Urban Renewal Mission , setting up of the Nirbhaya Fund for women's safety with a corpus of Rs 1000 crore and an all-women bank with a capital outlay of Rs.1,000 crore.
The schemes like Rajiv Gandhi Equity Savings Scheme and one time settlement for service tax assesses are greatly appreciated, Dhoot said.
Initiatives like revisiting of the oil and gas exploration policies and coal pricing pooling would help the key infrastructure sectors of the oil and power, Assocham said.