FICCI criticises heavy dependence on bank borrowing
Saturday, 12 June 2010
FE Report
The Foreign Investors' Chamber of Commerce and Industry (FICCI) said the proposed budget is somewhat ambitious with possible heavy dependence on the bank borrowing.
FICCI said: "We feel that it will require strong monitoring to achieve the goals of 19.59 per cent higher budget than that of the 2009-10 fiscal."
The FICCI expressed its concern as the budget is heavily dependant on borrowing from banking system.
"This might tighten the liquidity situation and cause an upward trend in deposit rates with consequent effect on lending rates thus making funding of trade, commerce and industries costlier," FICCI said.
It was critical of levying supplementary duty on the locally manufactured constriction materials like paints, mosaics, tiles, particle board and fittings.
The chamber body was also critical of imposing capital gain tax on companies trading in securities and tax on share premium.
The FICCI expressed its concern over enhancement of the discretionary authority of the VAT officials.
The FICCI, however, appreciated the measures, especially in the Rural Development and Local government, Education, ITC, Energy and Power, Communications and Environment sectors.
It said allocation in energy sector will help improve the investment climate in the country.
"The plan for educational development may not be effective in absence of an appropriate infrastructure," FICCI budget reaction said.
The FICCI, however, hailed the reform in the procedures of VAT price declaration and move to issue tax card for top-ranking tax payers.
The FICCI observed that the recommendations from different chambers and trade bodies for changing the rate of corporate tax on banks and financial institutions and mobile operators were not reflected in the budget.
It said there was strong recommendation from chambers for enhancing the coverage of central registration up to manufacturing activities.
It said no step has been taken in the budget to eliminate the long suffering of the manufacturers in this respect.
It also said that the limit of individual tax exemption has not been considered despite recommendations from different chamber bodies.
"This was essential to give relief to low income earners in view of price hike of essentials."
FICCI, however, feels that the proposed budget with necessary amendments will help achieve its goals.
The Foreign Investors' Chamber of Commerce and Industry (FICCI) said the proposed budget is somewhat ambitious with possible heavy dependence on the bank borrowing.
FICCI said: "We feel that it will require strong monitoring to achieve the goals of 19.59 per cent higher budget than that of the 2009-10 fiscal."
The FICCI expressed its concern as the budget is heavily dependant on borrowing from banking system.
"This might tighten the liquidity situation and cause an upward trend in deposit rates with consequent effect on lending rates thus making funding of trade, commerce and industries costlier," FICCI said.
It was critical of levying supplementary duty on the locally manufactured constriction materials like paints, mosaics, tiles, particle board and fittings.
The chamber body was also critical of imposing capital gain tax on companies trading in securities and tax on share premium.
The FICCI expressed its concern over enhancement of the discretionary authority of the VAT officials.
The FICCI, however, appreciated the measures, especially in the Rural Development and Local government, Education, ITC, Energy and Power, Communications and Environment sectors.
It said allocation in energy sector will help improve the investment climate in the country.
"The plan for educational development may not be effective in absence of an appropriate infrastructure," FICCI budget reaction said.
The FICCI, however, hailed the reform in the procedures of VAT price declaration and move to issue tax card for top-ranking tax payers.
The FICCI observed that the recommendations from different chambers and trade bodies for changing the rate of corporate tax on banks and financial institutions and mobile operators were not reflected in the budget.
It said there was strong recommendation from chambers for enhancing the coverage of central registration up to manufacturing activities.
It said no step has been taken in the budget to eliminate the long suffering of the manufacturers in this respect.
It also said that the limit of individual tax exemption has not been considered despite recommendations from different chamber bodies.
"This was essential to give relief to low income earners in view of price hike of essentials."
FICCI, however, feels that the proposed budget with necessary amendments will help achieve its goals.