Reaction to the Union Budget 2012-13

Reaction to Union Budget 2012-13
Lack Lustre Budget says Mr. Vijay Kalantri Vice Chairman – World Trade Centre Mumbai (WTC) President – All India Association of Industries (AIAI)
World Trade Centre Mumbai (WTC) and All India Association of Industries (AIAI) welcome the decision to implement Goods and Service Tax (GST) from August 2012 which will simplify and rationalize the tax structure. We further welcomes the much needed increase in viability gap funding for the infrastructure sectors like roads, port. Power and further inclusion of Oil and Gas and Tank farm will boost the growth of the Infra sector.
WTC & AIAI welcomes the introduction of much needed Mutual fund for Micro, Small and Medium Enterprises (MSME) sector to tune of Rs. 5,000 Crores which will meet the need for seed capital of this vibrant sector, even the Excise exemption limit should have been increased in view of inflation.
The allowing of External Commercial Borrowing (ECB) for sector like Aviation and low cost housing introduction of doubling the amount of tax free bonds for infrastructure sector such as Ports, Power, and Road etc will give the much needed impetus to achieve over 7% of GDP growth.
However increase in the Excise duties and Service Tax by 2% will adversely impact the automobile, engineering and manufacturing industry and various provision and alteration made in rules of Service Tax, Excise and Customs duty will make the procedure more cumbersome for the assesses and increase harassment.
The Hon’ble Finance Minister, Mr. Pranab Mukherjee should have initiated measures and incentives to boost the infrastructure related industries. However the Budget will add to the inflationary trend and in turn could have a ascending effect on the economic/manufacturing growth.
AIAI feels that the negative list on the Service Tax may be re-looked into. The fiscal deficiency of 5.1% is matter of concern and various leakages in regard with subsidies and popular schemes need to be implemented transparently to avoid further increase of fiscal deficit and misuse of schemes.