Union budget welcomed by K'taka industrial bodies

Bangalore, Feb 28 (UNI) The chambers of commerce and industry in Karnataka welcomed the Union Budget, presented by Finance Minister P Chidambaram today, hailing it as ''futuristic''.

Federation of Karnataka Chambers of Commerce and Industry President R C Purohit said the budget proposals addressed the issues of education, social welfare, healthcare, water system, rural development and it would benefit the country in the long run.

For the industry, although the Excise Duty exemption slab for SME sector had been increased, surcharge from Income Tax had been withdrawn for units making profit of less than Rs one crore. But these advantages have been negated by tax on works contract, one per cent cess on taxes and increase in Dividend Tax, he felt.

Mr Purohit said permitting the State Governments to go in for Tax-Free Bonds would be beneficial to public utilities like Greater Bangalore Mahanagara Palike.

No specific immediate measure was announced for controlling the inflation, which had reached an alarming stage, he said.

Bangalore Chamber of Industry and Commerce President Venkat Kedlaya welcomed the stability shown in the budget and the long term measures initiated to contain inflation. The reduction in duty on fuels was a pointer to the seriousness of containing the prices.

The Chamber welcomed the initiatives to revive the agricultural sector and said the budget carried on with the good work in the Railway budget, which also was important for fighting inflation.

''We are encouraged by the success of VAT and the move to phase out CST with one per cent reduction this year. The statesmanship of the Empowered Committee and the Finance Minister in facilitating this bodes well for the future,'' it added.

However, the BCIC was disappointed with the rate hike of dividend distribution tax as this would affect the industry. The extension of Minimum Alternate Tax to include the IT companies, the proposed FBT on ESOPs together with the dividend distribution tax, would have a negative impact on the technology sector and should have been avoided.

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