Bangalore/New Delhi, Feb 25 (ANI): Industrialists here have given mixed reactions to the Central Government's decision to cut factory gate duties and service taxes in a bid to boost demand and revive economic growth.
Welcoming the step, Subhash Agarwal, co-chairman, International Trade Community, Federation of Karnataka Chambers of Commerce and Industry, said that it would help in fighting the current recessionary trend.
"The service tax reduction and excise duty cut action is a very wise step in this recessionary trend. It will help us to fight the recession, what the industry and commerce is going through. Cost of the things and cost of the services will come down," said Agarwal.
On the other hand, others said that the step was just a political gimmick ahead of general elections.
"I don't think it will be a major, big impact on the people. It's a psychological benefit to the consumers. I don't feel any other benefit at the time of elections," said Narendra Singhal, a businessman.
Welcoming the tax cuts announced by the government, the Federation of Indian Chambers of Commerce and Industry (FICCI) said that it would help the domestic economy to face the global economic slowdown.
FICCI President Harsh Pati Singhania said that the moves would give boost to infrastructure development and help the domestic economy to face the global economic slowdown.
Warning of tough times ahead, the government cut the rate of central excise duty by two percentage points to eight percent on Tuesday. Tax rate on services has been trimmed to ten per cent from 12 per cent.he government has already announced two stimulus packages, including four billion dollars in extra spending and an earlier four-percentage point cut in general excise duty.
Along with spending on a pay hike for civil servants and a massive programme to write off the debt of small farmers, the extra spending has helped swell the fiscal deficit to an estimated six per cent of gross domestic product in 2008-09.
The government reduced the excise duty on bulk cement to eight per cent and extended the customs duty cut on naphtha for power firms beyond March 31, 2009. (ANI)