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Nothing for growth, say biz houses
Ruchika M. Khanna
Tribune News Service

Chandigarh, July 6
The Budget fails to give any direction for industrial growth, say corporates in the region. Though this Budget shows the way for initiating tax reforms in a phased manner, the industry is upset at no major relief being announced it to stimulate growth.

Putting to rest the speculations of a push to the corporate sector, especially the small and medium enterprises (SMEs), the Budget failed to bring any major relief to the industry as no cuts were announced in corporate taxes. Though the fringe benefit tax (FBT) and the commodity transaction tax (CTT) have been scrapped, and a Rs 4,000-crore corpus created with Small Industries Development Bank of India (SIDBI), industrialists in the region say the hike in the minimum alternate tax (MAT) will offset all benefits accrued from the abolition of FBT.

Pranav Gupta, managing director of Parabolic Drugs and co-chairman of the PHD Chamber (Haryana state), said the hike in MAT from 10 per cent to 15 per cent was a retrograde step for the pharmaceutical industry. “MAT was introduced to remove inequality in taxation of corporate taxpayers.

This is the amount that companies pay as tax on their book profits. It is especially bad for the pharma units located in non-tax exempt states like Punjab and Haryana, as the increase in MAT will offset the benefit arising out of income tax deduction on research and development,” he said.

Corporates in the region felt too much of political tinkering with economic affairs was not a good thing for the growth of the country’s economy, especially at this time of global meltdown. Most of the industrialists in the region said because of political compulsions, the outlay for UPA government’s pet schemes like the NREGA, nothing had been done for the industry.

SP Oswal, chairman of the Vardhman group of companies, said though the textile sector had been one of the worst hit by recession, the duty on man-made fibre had been increased from 4 per cent to 8 per cent.

“This will increase our cost of production. Already, we have been hit hard by 45 per cent hike in the MSP of cotton, when the international prices of cotton are down. The only relief for us is that there is no excise duty on cotton,” he said.

With the Finance Minister talking of paving the way for goods and services tax, simplification in filing of returns, and expanding the scope of presumptive taxation to all small businesses with a turnover of up to Rs 40 lakh - the Budget proposals indicated tax reforms, said Ashok Khanna, a prominent industrialist of the city.

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