"Manchester of India" disappointed with Budget

LUDHIANA, MAR 1: The first Budget of the millennium, feels the "Manchester of India", contains more rhetoric and high-sounding p...

LUDHIANA, MAR 1: The first Budget of the millennium, feels the "Manchester of India", contains more rhetoric and high-sounding phrases than substance. Captains of industry, when contacted by The Indian Express, maintained that the Finance Minister had not really taken the bull by the horn and opted for such measures as were politically convenient in the present atmosphere.

A talk with the who`s who of the industrial sector here brought out reactions ranging from jubilation to disappointment. While giants in the small-scale industry hailed the Budget terming it as "innovative", it has been described as a death-knell by the textile industry and exporters in the engineering industry.

S P Oswal, CMD of the Vardhaman Group of Industries, said, "I do not see the textile industry reviving with this budget. On the contrary, the increase in duty on fabric processing would sound death-knell for us. Given the proposals, the textile industry is in no way going to grow. To put in simpler terms, the budget lacks the glamour that was expected by the industry.", he added.

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S C Rahlan, regional chairman, Engineering Export Promotion Council, said, "The exporters are disappointed over the lack of adequate measures to kickstart economy of the engineering industry. The withdrawal of income tax exemption from exports would hit the industry severely which has already touched the lowest ebb".

Describing the budget proposals as somewhat different from those indicatedin the pre-budget speeches and hinted at in the Economic Survey, Vishwanath Dhiri, President of Ludhiana Stock Exchange, said, "The FM had indicated that the Budget would be harsh one and the Government would emphasise on cutting down its expenditure but the Budget proposals do not live up to the promise. If last year the Government had taken one step ahead in economic reforms, it has taken one step backwards this time", he added

R C Singal, corporate law adviser and director of Ludhiana Stock Exchange, said the main thrust of the Finance Minister had been on controlling the fiscal deficit. He has relied more on continuity of the process of economic reform and liberalisation, However, for the capital market, some proposals may have a dampening effect. These are dividend tax and imposition of MAT. But the increase in investment limit by FIIs from 30 to 40 per cent could give a big boost to the capital market, he added.

Representative of various small-scale industries have welcomed the Budget. V P Chopra, President of the Federation of Associations, said, "This is an innovative budget which predicts good health for the small-scale industry. The proposed credit guarantee scheme and SIDBI loans of up to Rs 25 lakh at two per cent rate of interest are all good signs which may contribute significantly to the health of small units.

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Commenting upon the agricultural and rural proposals in the Budget, P S Rangi, renowned farm economist, felt that while the custom duty on import of farm commodities would fetch a good amount for the State Government the increase in duty on urea would have an adverse effect on the farming sector. "With the rise in duly on urea, the rates of all fertilizers would see a sharp hike which would increase the cost of production of wheat and paddy by five to seven per cent, axing the profitability of the farmers. But at the same time, the FM has taken a good step by imposing duty on import of farm commodities. With this, states like Punjab and Haryana which always face problem of surplus food would earn good money,” Ranji added.

Terming the budget proposals as balanced and pro-rural community, Karam Singh, another farm economist, said the FM had framed the budget proposals keeping the poor economy of the rural and farm sectors in mind.