Banking sectors hail Budget

Representatives from Industry call it ‘average'

March 17, 2012 12:24 pm | Updated 12:24 pm IST - MANGALORE

Representatives of the banking sector have welcomed the budget, while those from industry have called it “average”.

Latha R. Kini, president, Kanara Chamber of Commerce and Industry (KCCI), called it “a very average budget”. The Finance Minister had given too little in one hand and taken away too much in the other by increasing service tax and Central excise by 20 per cent. It would lead to price rise and impact all services. With the agriculture sector insulated, the burden passes to the common man to garner resources. Traders had to face dwindling profit margins. There was absolutely nothing in the budget to benefit the trading community, which was the real tax collector for the government, she said.

Corporation Bank CMD Ajai Kumar said that capitalisation of banks with Rs.15,888 crore would help in improving the financial strength of banks. The possibility of creating a holding company for the same was also a good step, which may be required to be studied again in line with the working group recommendations submitted by the Reserve Bank of India (RBI) in May 2011.

Narayan Yaji, Regional Manager, Mangalore, Karnataka Grameen Vikas Bank, called it “a balanced budget”. It favoured development, benefits the rural sector and the people though not the salaried or the middleclass. The interest subvention for women from self-help groups reflected a carrot-and-stick policy.

The Finance Minister had appreciated public sector banks and regional rural banks' contribution for completing the core banking solution (CBS). If the budget was implemented, it would create better job opportunities and help weaker sections of society. “Both are cleverly stitched into the budget,” he added.

B.A. Nazeer, president, Kanara Small Industries Association, described the budget as “a disappointment to MSMEs”. The Finance Minister completely ignored the MSME sector's demand for increasing the excise exemption limit in view of increase in the cost of goods and services. The burden of additional 2 per cent in excise duty would add to cost of raw material and other inputs. Increase in service tax for all services would fuel cost of essential services, burdening the SSI sector and ultimately, the common man. Implementation of Direct Tax Code (DTC) was welcome. Setting up of Rs. 5,000-crore venture fund with SIDBI was welcome but “too meagre”, he said.

M.M. Baheti, Principal and General Manager, Regional Training College, National Bank for Agriculture and Rural Development (NABARD), Mangalore, said the budget had certain “very good announcements that will go a long way in promoting agriculture and rural development”. It would boost empowerment of women in the already-strong SHG movement, encouraging women to start income-generating activities. The proposal to provide interest subvention to women SHGs “is very significant”. RRBs would get a boost. Modifying Kisan Credit Card into smart cards was a positive step. Enhancing allocation for Rural Infrastructure Development Fund was welcome.

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