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Industry experts dub Union budget 2012-13 as anti growth


March 16, 2012 - New Delhi/Bangalore

Indian industry experts on Friday echoed that the Union budget, though balanced, does not appear to be simulating growth while raising serious concerns to reduce fiscal deficit.

"The first reaction of FICCI (Federation of Indian Chambers of Commerce and Industry) to the budget is that it is not going to stimulate growth in the economy and actually we have been talking about growth and from FICCI we have been making several repetitions that the Finance Minister should take steps to stimulate growth. The only place where he has accepted a suggestion from FICCI is to remove the cascading impact of dividend distribution tax," said R V Kanoria, President, FICCI.

"Other than that the finance minister seems to have adopted a policy of fiscal consolidation through raising revenue through the taxation mechanism rather than through mechanisms outside the taxation system," he added.

Meanwhile, Senior Vice President of FICCI, Naina Lal Kidwai said that waiver of duty on coal would boost the power sector.

"Waiver for importing coal bill helped the power sector because one of the issues for power has been whole supply and the price of that coal when it is imported is pretty high so I think those are some of the positive there. Equity markets, capital markets infrastructure are the positives as against the negative on service tax increase and excise increase," said Kidwai.

Vice chairman of Bharti Telecommunications Rakesh B Mittal, however, was supportive of Mukherjee's budget, terming it as 'balanced' in view of India's current economic situation.

"According to the current economic situation of the country, I think the Finance Minister Pranab Mukherjee has proposed a balanced budget. He has highlighted social agendas inclusively be it the social or education. I think in the agriculture sector new provisions have been proposed that would increase productivity. The sector has also been improvised," said Mittal.

Echoing similar views, Infosys Chief Financial Officer (CFO) V Balakrishnan said that the budget is sensible even as he expressed concerns over steps to reduce fiscal deficit.

"I think it is a very pragmatic and realistic budget, looking at how the world is today. Of course India's growth has come down to 6.1 percent (in) last quarter. This year it is estimated to be 6.9 percent, so the focus of the budget is on how to enhance the growth, because next year the government is projecting 7.6 percent growth," said Balakrishnan.

"So lot of focus on infrastructure and education which are two important areas for growth and fiscal deficit is a big concern for fiscal 2012 has gone to 9.5 percent," he added.

With General Elections set for 2014, the budget, a year from now, is expected to be loaded with populist spending measures. Friday's budget was thus viewed as a last opportunity for Singh's government to roll back a yawning fiscal gap.

ANI

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