Little cheer for NE industry, planters upbeat

GUWAHATI, February 28: Although the Union budget 2001-2002 has been widely hailed by the industry and commerce sector in the State, the Federation of Indian Industries and Commerce of Northeastern Region (FINER) has expressed its disappointment that the budget has failed to address the demand of removing of locational restrictions existing in the Northeast industrial policy. The FINER, however, termed the budget as a whole as "positive and growth oriented" and a reflection of the Government's pro-active attitude towards economic reforms. The FINER president SK Jain said the Finance Minister had done a commendable job by taking various measures for the stability of tax regime. According to the federation, the budget is expected to stimulate investment in the capital market because of reduction in tax payable on dividends from 20 per cent to 10 per cent. The FINER president said, "it was expected that locational restriction existing in the Northeast industrial policy announced by the Centre in 1997 would be removed to enable entrepreneurs of the region to take advantage of the benefit of Central excise and other incentives as admissible under the policy." He appealed to the Finance Minister to give cognizance to issue related to Northeast so that necessary compliance could be done during the course of presentation of Finance Bill in Parliament. According to the executive president of Northeast Tax Payers Association, RS Joshi it is certainly a 'no nonsense' budget as Yashwant Sinha has dared not to repeat Mamata Banerjee. He said it was a balanced and growth oriented budget combined with vision and determination. "For the first time, all sections of the society have been given due weightage and a fair deal. Whereas capital market has got the much needed fillip and is bound to bounce, rationalisation of direct and indirect taxes will lead to better compliance," he added. Banking Ombudsman for Northeast and noted business economist GP Barua said the Union Budget presented by the Finance Minister Yashwant Sinha is "indeed an excellent one that addresses structural issues on a long term basis." Barua who was a former vice-president of the tea giant Williamson Magor Ltd, said the tea industry would be particularly happy with the budget as custom duty of imported tea has been raised from 35 per cent to 70 per cent. "This will put indigenous tea in a better position to compete with cheaper imported tea," he said pointing out that the industry would have been happier if Central Excise Duty would have been abolished from the industry. He further said the trade unions, however, would not approve of the budget as the corporate sector had been given the power for lay-offs, retrenchment without taking Government permission if the number of employees is less than 1000. Assam State committee of the Centre of India Trade Unions (CITU) has termed the Union budget as anti-worker as it favoured cut down on working force and disinvestment of public sector units. The CITU unit has decided to stage a protest demonstration here at 11.30 am on March 2 against the budget. RK Choudhury said that the Union Budget appeared to be a clever exercise. It was, in fact, a reform oriented budget with many elements of populism in it. "The budget does not mention growth rate of economy as such, but is claims that its design will make it growth-oriented. However, in order to achieve growth we have to go for a quantum jump in investment which grows out of savings. The incremental capital output ratio presently worked out to 4.2% and hence if one expects the economy to grow at a rate of more than 7%, it will require to generate at least 30% investment as ratio of the GDP," he said. Choudhury pointed out that country's savings rate was presently 22%, therefore, it was a bit doubtful as to what extent the budget will turn out to be growth oriented since provisions for savings generation were not very much present in the budget. Our Staff Correspondent adds from New Delhi: The budget has evoked sharp reactions from the Northeast MPS. The chairman of Northeast MPs Forum, PR Kyndiah reacting to the budget said the Northeastern region expected a lot from this budget for its economic growth. The budget had nothing for the Northeast region and was totally disappointing, he added.