India Inc. not satisfied, but hails high rural spending (Lead)February 16th, 2009 - 7:28 pm ICT by IANS
New Delhi, Feb 16 (IANS) Leading industry lobbies in the country said the interim budget, presented in the Lok Sabha Monday, failed to live up to expectations, but welcomed the higher spending in social and infrastructure sectors, saying it will “help the economy get out of the current stagnation”.
The Associated Chambers of Commerce and Industry (Assocham) said in its response that it had expected a third and last stimulus package in the interim-budget. But “Mukherjee restrained himself from presenting it and rather chose the new government to unveil the package,” the industry body said.
It added that at least surcharge on corporate taxes should have been removed and new corporate tax ceiling introduced in the budget.
“There was no hint in this direction in the interim-budget. Likewise, on infrastructure refinancing, the focus is there in the budget but directions are not clearly laid out,” Assocham president Sajjan Jindal said.
He, however, welcomed the government’s decision to strengthen its social schemes and “enhance allocations for rural infrastructure, which will become main sources for demand generation”.
Added Harsh Pati Singhania, president of the Federation of Indian chamber of commerce and industry (FICCI): “The interim budget has set the direction for the next government and gives a clear message on what steps need to be taken in the months following the general elections.”
The FICCI also welcomed the government’s move to increase spending in the rural sector.
“In fact, the government has allocated Rs.30,100 crore (Rs.301 billion) for the rural employment generation scheme and this is a positive move in line with its stated commitment to the development of rural economy,” Singhania said.
The Confederation of Indian Industries (CII) also hailed the higher allocation for the infrastructure sector.
“The CII is keen to see an increase in the funds flowing into infrastructure projects and the social sector. While the former will have a multiplier effect on the economy, the latter will put money into the hands of the people. Both are required to help the economy get out of the current economic stagnation,” CII president-designate Venu Srinivasan said.
The CII also welcomed the extension of the interest subvention on pre and post-shipment credit to exporters by calling it “a timely measure”.