CII PRESS RELEASE
CII lauded the efforts of the Finance Minister for presenting a balanced
budget in the midst of the necessity to reign in high fiscal deficit and revive
investor confidence. The budget has focused on bolstering MSMEs, incentivising
the infrastructure sector by expanding ECB funding options and on the overall
inclusive growth aspect by giving incentives to the social sector. The
necessary support has been offered to the agriculture sector through several
incentives.
CII complements the Finance Minister's efforts to give a boost to the social
sector - particularly in areas of education, skill development and low cost
housing. Allowing weighted deduction for training imparted in companies for
skill development will give a thrust to the skill development initiatives. The
proposal to introduce a credit guarantee fund for educational loans in place of
the erstwhile system of loans based on collaterals will go a long way in
enabling poor students to go in for higher education.
CII also feels that the proposal to set up the India Opportunity Venture Fund
of Rs 5000 crore for the MSME Sector will assist MSMEs to access finance and
set up new units.
Affordable housing has received a fair amount of attention in the budget. CII
opines that allowing of ECBs in the sector and inclusion of affordable housing
in the negative list will structurally see developers move into this segment of
real estate. However, the budget has not given the much needed industry status
to the real estate sector and has not spoken about FDI liberalization in this
segment which is reeling under a severe liquidity crunch and would have
benefitted from these measures.
The proposal to set up the India Opportunity Venture Fund of Rs 5000 crore for
the MSME Sector will assist MSMEs to access finance and set up new units.
However, CII has added that the Budget has set no definite timelines for GST,
neither has it been very specific on disinvestment issues. The 2% hike in
excise duty and service tax does disappoint industry but perhaps were needed in
the context of the high fiscal deficit. Over time the new equilibrium is
expected to set in. The critical issue for industry is the efficacy and
integrity with which the money generated through taxes is spent on the social
agenda.
16th March 2012
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