State gives thumbs up to FM's interim budget

AHMEDABAD: Gujarat Inc, though disappointed at Gujarat being left out of Union finance minister Jaswant Singh''s interim budget, has given the thumbs up to the finance minister''s bid to keep the country on the growth trajectory.
The adoption of an overall development model focusing on agriculture, infrastructure development, power sector, privatisation, simplification of tax processes and development of small and medium enterprises (SMEs), among others, shows the government''s focus on development at the macro level, according to Confederation of Indian Industry (CII), Gujarat, chairman Piruz Khambatta.
"The budget will heighten the reigning feel good factor," tax expert Mukesh Patel said, adding that the improvement of tax collections beyond estimates had substantiated the finance minister''s claims of India Shining. "The direct tax front has been given a positive direction with his statement on the need to raise exemption limits and standard deductions for the salaried class," Patel said.
Gaurav Nanavati, deputy chairman of CII''s western region council, said that the focus on development through agriculture by recognising it as a key sector of the economy and treating it as such instead of the earlier policy of giving subsidies, would lead to overall economic growth.
"The special rate of interest of nine per cent and special credit delivery mechanism to ensure fund flow to the farmer would give agriculture its due in the economy."
He also felt that the 50 per cent reduction in stamp duty on central government stamp papers would encourage states to take the lead in rationalising stamp duties, which is retarding growth. Amit Goradia, chairman, FICCI Gujarat State Council, felt that the fiscal measures proposed would have a positive impact on exports, because the transaction cost would come down especially with e-filing of excise returns and self assessment of Customs clearance.
He, however, expressed apprehension that the merger of 50 per cent of the dearness allowance of central government staff could lead to inflationary pressure. Gujarat Chamber of Commerce and Industry (GCCI) was of the opinion that the budget did not contain any definite proposal to give impetus to the capital markets except for extending the benefit of longterm capital gains tax to three years.
Terming the withdrawal of tax on MNCs outsourcing to India as a right signal, Parul Mehta, co-founder of Ahmedabad-based BPO player Motif India, said that the move would accelerate the Indian BPO industry by bringing more outsourcing jobs.