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Union Budget: 2019-20

Budget fails to enthuse industry

LUDHIANA: Maiden Budget presented by Finance Minister Nirmala Sitharaman has failed to evoke a positive response from the local industry.

Budget fails to enthuse industry

Executive Committee of CICU discusses the Union Budget 2019-20 in Ludhiana on Friday. Tribune Photo: Himanshu Mahajan



Shivani Bhakoo

Tribune News Service

Ludhiana, July 5

Maiden Budget presented by Finance Minister Nirmala Sitharaman has failed to evoke a positive response from the local industry. Be it the textile industry or the bicycle sector, industrialists feel there is nothing in the Budget for the benefit or improvement of the MSMEs.

The industrialists said the MSMEs were the backbone of the industry and these needed to be upgraded to bring desired results.

Nothing for bicycle industry: UCPMA

Avtar Singh Bhogal, adviser to United Cycle and Parts Manufacturers’ Association (UCPMA), said going by the present Budget, it seems there is no future for the MSMEs here. “Who will make ‘Make in India’ products when there will be no MSME? There is absolutely nothing beneficial for the MSMEs in the Budget. We expected so much relief but nothing has come out,” said Bhogal.

Gurmit Singh Kular, president of Federation of Industrial and Commercial Organisation (FICO), said except for promoting electric vehicles, there was nothing much in the Budget. The whole bicycle industry was hoping for the implementation of TUFF Scheme, which is nowhere in the Budget. How can we compete with countries at the global level when no good schemes are initiated or benefits given to us? asked Kular.

No hike in tax limit

Narinder Bhamra, President of Fastener Manufacturers Association of India and Convener of Federation of Industries and Trade, Punjab, said the Budget had disappointed the MSMEs once again as there was no relief as far as direct taxes are concerned. “We were expecting enhancement of the income tax limit up to Rs 5 lakh. Though the government has imposed extra tax of 3% on income between Rs 2-5 crore, and 7% extra tax on income between Rs 5-7 crore, no relief has been given to the MSMEs and the middle class.

“The government has brought the GST in line with foreign countries. While the foreign countries are also providing social security to their citizens, the Government in India seems to be only concerned about collecting taxes from the MSMEs,” said Bhamra.

“We feel that we should shut down our factories and start agriculture. To add to our disappointment, the prices of petrol and diesel have been increased by Rs 2 per litre which will burden the MSMEs as freight rates will also go up,” he added.

‘Minister’s statement doesn’t match fiscal statement’

The president of Federation of Punjab Small Industries Association (FOPSIA), Badish Jindal, said India was going to face a big trouble with a fiscal deficit of Rs 7,03,760 crore and a revenue deficit of Rs 4,85,019 crore, which was all time high. To cover this loss, the government is planning to borrow Rs 4,48,122 crore through bonds. Last year, the government paid Rs 5,87,570 crore as interest on loans and the provision for 2019-20 is Rs 6,60,471 crore, which is about 25% of the net receipts.

“Under such circumstances, the freebies will cost a lot to the Indian Economy. For 2019-20, the government proposes Rs 75,000 crore as pensions to the farmers which seems an unwanted step. In her speech, the Finance Minister talked a lot about the MSMEs but the fact is that for the MSMEs, the Budget is very negative. The government has merely allocated Rs 6,984 crore to 6.5 crore MSMEs of India. The mandatory income tax return for electricity bill above Rs 1 lakh is illogical as most of the time, power connections are common in families. The increase in excise on petrol and diesel will increase the cost of production. Overall, this Budget cannot be called industry-friendly,” said Jindal.

CICU: Industry burdened to extend benefits to farmers

The general secretary of Chamber of Industrial and Commercial Undertaking (CICU), Pankaj Sharma, said by putting more financial burden on industry, benefits were extended to the agriculture sector. The auto-parts industry and engineering goods sector were in a recessionary phase, but no incentives have been given to them. The government claims to have given 2 per cent rebate on interest, which the RBI had already announced, but the benefit was never passed on to the industry by banks.

“We feel shattered and ignored. Even the labourers working in factories fail to get timely treatment at the ESIC dispensaries. We had requested the government to run the ESIC and health dispensaries under the PPP mode, but to no avail,” said Sharma.

FIEO appreciates Budget

Sharad Kumar Saraf, president, Federation of India Export Organisations (FIEO), said the Budget announcements were aimed at transforming India, ushering in $ 5-trillion economy and making the country the best place in terms of ease of living and ease of business. The Budget addresses some of the basic challenges faced by manufacturing as well as exports sector, including flow of credit, infrastructure bottlenecks, labour laws, skill, etc.

The export credit declined by 22% as on December 31, 2018, compared to the corresponding period in 2017. Now, Rs 70,000 crore allocated to the PSU banks will ease the flow of credit. The interest subvention of 2% given to the MSMEs as well as payment platform for bill filing for them will help in flow of credit at competitive costs. The investment of Rs 100 lakh crore in infrastructure in next five years through Bharatmala, Sagarmala, Jal Marg Vikas Project will help in improving logistics, reducing transportation cost and increasing competitiveness. The support given to GI products and artisans will provide much needed exposure to them and pave the way for further exports. Focus on clusters in bamboo, honey and khadi will not only create employment opportunities but also give a push to their exports.

Growth-oriented Budget in long run: Fico

Ajit Lakra, president of textile unit of FICO, finds the Budget growth oriented in the long term. Lakra said at present, there was less cash flow in the economy but the way the government was planning to put in a lot of money in every field, in times to come, India will have the best economy in the world. Massive funds are being put in to improve infrastructure, housing, roads, recapitalising of banks, etc, will give the Indian economy a major boost.

Woollen exporters welcome duty reduction

Wool and Woollens Export Promotion Council has welcomed a reduction in indirect taxes, which is Basic Customs Duty (BCD), on wool fibre and wool tops from 5% to 2.5%. Rajnish Ghai, chairman of the council, said the council had requested the Government of India for the abolition of duty on those products as wool fibre below 23 micron was not available in India. Our woollen industry is fully dependent on imports. This fibre is blended with other fibres for manufacturing various woollen products that are exported to many countries.

LEADER SPEAK

The whole bicycle industry was hoping for implementation of TUFF Scheme. How can we compete with countries at the global level when no good schemes are launched for us? —Gurmit Singh Kular, president of FICO

The auto-parts industry and engineering goods sector were in a recessionary phase, but no incentives have been given to them. — Pankaj Sharma, general secretary of CICU

Who will manufacture ‘Make in India’ products when there will be no MSME? There is absolutely nothing beneficial for the MSMEs in the Union Budget 2019-20. — Avtar Singh Bhogal, adviser to UCPMA

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