Special Correspondent

‘Provision for additional power generation awfully inadequate'

FKCCI terms the budget progressive

Bangalore: While generally welcoming the Karnataka budget for 2010-11, representatives of industry have expressed their disappointment with the tax proposals made by Chief Minister B.S. Yeddyurappa.

President of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) J. Crasta termed the budget “progressive”.

He said the budget's emphasis on agriculture, education, backward area development, infrastructure and urban development promote development in the medium to long-term. The FKCCI also welcomed the importance given to tourism development.

However, Mr Crasta has cautioned that the allocations made in these areas “should be properly utilised” so that the objectives are actually achieved.

Mr. Crasta said the increase in Value Added Tax (VAT) rates “is to a necessary evil”.

The FKCCI president said members are happy that their suggestions regarding increase in registration limits for dealers under both VAT scheme and the composition scheme have been integrated in the budget proposals. Members are also glad that their suggestion to introduce e-filing has been accepted.

The FKCCI also welcomed the reduction of VAT on masala powder mixtures, generators and railway sleepers and the reduction stamp duty rates.

Mr. Crasta said the increase in the luxury tax rate for hotel rooms as well as “the steep increase in the road tax for industrial vehicles, are a “disturbing feature of the budget”.

He urged the Government to reconsider the move as it will affect industry in general and tourism in particular.

Allocation for education

K.R. Girish, president, Bangalore Chamber of Industry and Commerce (BCIC), welcomed the higher allocation for primary education, agriculture, urban infrastructure, health and social sectors. “The allocation of Rs. 8,830 crore for primary education is timely, warranted and a much needed measure,” he said.

The establishment of 1,000 ITI's in public-private partnership mode, “while being laudable, suffers from inadequate allocation.” He said the allocation of Rs. 18,872 crores for Bangalore's infrastructure “would improve Bangalore's image”.

“However, the continuing neglect of development of the north Karnataka region is disappointing,” Mr. Girish said.

Mr. Girish said the provision of Rs. 500 crore for building additional power generation capacity to the extent of 11,000 MW “is awfully inadequate.”

He said “the severe power crisis the State is undergoing” warranted a more substantial allocation.

The BCIC president welcomed the move to acquire 15,246 acres of land for establishing a steel zone in Bellary and Koppal districts and also the proposal to set up Special Economic Zone in an area of 12,000 acres near the Bengaluru International Airport.