Trade bodies welcome budget

BANGALORE, MARCH 11. Trade and industry bodies here have welcomed the State Budget as growth-oriented, farmer-friendly and VAT-ready.

The Secretary-General of Bangalore Chamber of Industry and Commerce, R. Vishwanathan, said of the State's economic growth, 13.5 per cent has been from the manufacturing sector and 22.5 per cent from tertiary sectors such as information technology, biotechnology and business processing outsourcing. The State's agricultural sector has achieved a growth of 11.2 per cent.

The tax collection in the State in 2004-05 is expected to generate Rs. 508 crores. Increase in plan outlay for irrigation sector, watershed development programmes, crop insurance, continuation of subsidy towards interest, waiver of interest and penal interests on co-operative loans availed of by farmers is welcome, he said.

The proposals to set up Special Economic Zones (SEZs) for textiles and sector specific SEZs for IT and establishment of Science and Technology parks will spur industrial growth. Creation of an additional IT Industrial Techno Park in the Bangalore rural region has also been welcomed.


Mr. Vishwanathan said the proposals for setting up food processing cluster in Mangalore, industrial valves cluster in Hubli-Dharwad and auto component cluster in Shimoga augurs well with the National Programme for Development of industry-specific clusters.

Reduction of Central Sales tax on two and three-wheelers to one per cent is good news. But there is no clarity on entry tax and special entry tax after the introduction of VAT. The trade bodies have demanded that these taxes be abolished.

Tech parks

The Federation of Karnataka Chamber of Commerce and Industry has lauded the move on the Kaigarika Vikas Scheme, allocations for cluster development, establishment of 11 more technology parks, the hi-tech city and Biotech Park, which are expected give a fillip to development. The Federation welcomed the specific allocations for the Metro Rail and the new international airport, which need to be speedily implemented.

"However, the absence of any emphasis on Small and Medium Enterprises is glaring. Their demand to include goods (IT products) under the category of four per cent rate under VAT has not been looked at. Though it is stated that industries exempted from tax will be brought under the VAT chain, there is no clarification," said Manandi N Suresh, President of FKCCI.

SSIs unhappy

The President of Karnataka Small Scale Industries Association, Mahadev S. Dhadd, criticised the absence of a provision to clear the subsidy arrears of small-scale industries.

The association rued there is no focus on issues regarding overcoming national competitiveness in spite of the KASSIA role in the economic growth through employment generation and exports. The expectations of a measure to prevent and rehabilitate sick units have also been belied, he added.