Friday, March 1, 2013

Budget does not address needs of Industry - FAPCCI

The Budget presented by Mr. Chidambaram, Hon’ble Minister for Finance has nothing to incentivize and promote industrial growth and has not provided for any tax incentives to benefit MSME sector.

 Budget is mainly aimed at increasing the potential growth rate to 8% which has recorded only 5% for 2012-13. Regarding the proposed industry corridors to be developed in the first half of FY-2013 namely Chennai-Bangalore industrial corridor and Bangalore-Mumbai industrial corridor FAPCCI stated that they do not benefit Andhra Pradesh state except for a small portion of the border Districts like Chitoor.

However allocation of one major port to Andhra Pradesh is on positive side. It is disappointing to note that the road projects are awarded to Gujarat, Madhya Pradesh, Maharashtra, and Uttar Pradesh.

The proposed 15% of investment allowance to the companies investing Rs. 100 Cr are more in blank and machinery during the period 14 /2/2013 to 31/3/2015 will not benefit medium or most of the large scale industries this seems to be targeted at attracting FDI into the economy.

No announcement was made on development of National Water Way No.4 which benefits the Andhra Pradesh.

Thou power is in shortage all over the country and the power scenario is not improving no specific measures were announced to improve power situation in the country except to say that guidelines for financial restructuring of DISCOMs have been announced.

The announcement that Oil and Gas exploration policy will be reviewed and also Price Policy will be reviewed brings some hope to Andhra Pradesh and we expect to have more allocations for the state.

The proposal to retain the benefit of preferences  with the Small and medium enterprises for 3 years after they graduate to higher category is a welcome step but keeping in view the amount of investment required and the cost of the credit it should be for a longer period i.e., from 5 to 7 years.

Fapcci welcomed the importance and extension of the sectors for skill development given in the Budget proposals.

The proposed 1% Tax Deduction at Source (TDS) on transfer of immovable property worth over Rs 50 lakhs will affect the middle income groups adversely.

FAPCCI is disappointed to note that there is no clear cut direction on GST. Work on Draft Constitution Amendment Bill and GST Law expected to be taken forward.

FAPCCI feels that Crop loans scheme must be implemented throughout the year to protect the farmers.  The scheme shall be applicable to all those farmers who have obtained short term crop loans from scheduled banks. Watershed management scheme is very crucial to increase the crop productivity as well as land. More funds are required under this scheme.

FAPCCI welcomes the National Food Security Mission and allocation of Rs.10,000 crore for Food Security Bill is appreciated.

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