The Union Budget 2012-13 has made strong efforts to balance fiscal deficit with revenue generation, according to the Chairman, Confederation of India Industry, Vizag Zone and Director (Commercial), Rashtriya Ispat Nigam Limited/ Visakhapatnam Steel Plant T.K. Chand.
While measures to contain fiscal deficit to 5.1 per cent, subsidies to two per cent of GDP, relief in Income Tax, abolition of import duty on coal and lignite, no increase in corporate tax, excise exemption on branded silver jewellery, encouragement for investment in infrastructure, rationalisation of IPO for PSUs had brought some cheer to the industry, the increase in Excise Duty and Service Tax from 10 per cent to 12 per cent had caused a little disappointment as it was not in line with the thinking to firm up industrial growth, he said.
“Budget should have given some incentive to industry such as increase in rate of depreciation, reduction in Minimum Alternative Tax (MAT), and Security Transaction Tax (SAT) to boost capital market and investment. Construction sector, which has been reeling under high interest rate, deserve some specific incentive which has not come. With increase in Excise Duty and Service Tax – Steel Prices are likely to go up by minimum Rs.1,000 to Rs.1,200 per tonne which may add owes to the construction sector. Steel Sector has been a little disappointed as the industry was expecting increase in customs duty on alloy steel from 5 to 10 per cent or at least to 7.5 per cent in the backdrop of import of cheap alloy steel from international market and idling of domestic capacity by 30 to 40 per cent and severe dent in margin. Similarly, ferro alloys industries have been expecting increase in customs duty from 5 per cent to 7.5 per cent. However, the overall approach in budget though not innovative is a bold act of balancing to bring price stability,” he said.
