Terming the Interim Budget presented by Finance Minister P. Chidambaram as “balanced”, India Inc said it augured well for the manufacturing sector which had been bleeding.
“While industry expectations were limited from an Interim Budget formality, the emphasis laid on turning around the growth trajectory and reviving the manufacturing sector in particular are well received,” Federation of Indian Chambers of Commerce and Industry (FICCI) President Sidharth Birla said. The focus this time was on the fiscal deficit number, as the figure was being closely watched by all investors, he added.
On the excise duty reduction in select sectors, he said the Finance Minister had chosen the areas carefully based on the recent performance of the industrial sector.
Kris Gopalakrishnan, President, CII, said: “The Finance Minister has highlighted the importance of the manufacturing sector, which is key to reviving the economy. The performance of the manufacturing sector over the last one year has been consistently poor, and is in need of intervention by the government.” The excise duty had been reduced in some of the most affected sub-sectors of manufacturing and would help revive demand in these sectors, he noted. On the fiscal deficit, Mr. Gopalakrishnan said: “The fact that deficit has been targeted at 4.1 per cent for the next fiscal sends a strong signal and should help confidence in the economy.” The implementation of GST should also be a priority for the coming government, he added.
Associated Chambers of Commerce and Industry of India (Assocham) President Rana Kapoor said despite being low on expectations in an election year, the interim Budget had given a pleasant surprise to the manufacturing sector, which had been bleeding.
The excise duty cut on automobiles and capital goods would provide a much-needed relief to these sectors, he observed. Commenting on the task ahead for the new government, he said: “The industry would expect a much larger package from the new government to revive the manufacturing sector when a regular budget is presented some time in July.” The industry body feels there is a need to cap the non-Plan expenditure of the Central Government. “The non-Plan expenditure of over Rs.12 lakh crore gives an impression of a fat government which needs to reduce its size so that more resources are left for development,” Mr. Kapoor added.
T. V. Narendran, Managing Director, Tata Steel (India and South East Asia), said: “The government’s move to provide relief to the struggling manufacturing sector augurs well for the steel industry. However, it needs to be noted that the industry’s problems are more structural in nature.”
National Association of Software and Service Companies (Nasscom) said the research funding body announced by Mr. Chidambaram would help promote scientific research and help India gain leadership position globally in areas such as engineering and research and design.