Pro-farm budget not anti-industry

FARMERS selling their land for SEZs, malls and real estate and using the bumper harvest for buying a fleet of cars or foreign travel is bad news for the economy as well as the industry, said Krishan Kalra, the new secretary general of the Punjab, Haryana and Delhi Chambers of Commerce and Industry (PHDCCI) in Chandigarh today.

Keeping this and country’s low per acre productivity in mind, the present budget’s focus on agriculture should not be seen as regressive, he said.

Describing the 2007-08 budget as a mixed bag, Kalra said Finance Minister P. Chidambaram had many political and economic compulsions to take care of and tried his best to walk the tightrope. “Industry is like an oak tree and the smaller ones need greater care is what our Finance Minister feels and I do not totally disagree with him,” he added.

While the industry cannot cheer for the hike in Dividend Distribution Tax (DDT), extension of Minimum Alternative Tax (MAT), application of fringe benefit tax to ESOPs (Employees Stock Option Plan) and the additional one per cent education cess, no hike in corporate tax, capital gains tax and sales tax should hearten us, he said. Besides, measures such as increased outlay on infrastructure, cut in peak customs duty will pump up industrial growth, he added.

The PHDCCI has also welcomed the focus on strengthening the small scale industry. Increase in threshold limit for service tax, raising of excise duty exemption limit and removal of surcharge on income tax on taxable income of Rs 1 crore or less will boost the small scale industries, he said.

However, what is more unsettling for the PHDCCI is the proposed hike in minimum wages by 41 per cent in Haryana by Chief Minister Bhupinder Singh Hooda. Terming the hike as impractical, Kalra said wages are linked to the Consumer Price Index (CPI) and should be competitive. “The present minimum wages compare favourably with those in the neighbouring states of Punjab, Uttrakhand, Himachal and UP and the proposed hike will also deter those interested in investing in the state,” he said.

Resource://expressindia.com