Financial Daily from THE HINDU group of publications
Saturday, Jul 10, 2004
Financial Daily from THE HINDU group of publications Saturday, Jul 10, 2004 |
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Industry & Economy
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Budget `A good start to realise CMP' Pawan Munjal
IT is after several years that the Union Budget is addressing agriculture and social sectors comprehensively. The Budget for 2004-05 has made a good beginning to realise the components of the NCMP. Out of the seven objectives mentioned by the FM, agriculture, education, health and food security are the main areas where solid proposals have been brought in. Industry has been selectively benefited - the major among them being airlines, telecom, tractors and computers. In terms of promotion of investments there has been a higher depreciation provision for capacity expansion and R&D. Agriculture has received unprecedented support from the FM. He has strived to direct the credit to agriculture through banks, RRBs and cooperative banks and widened the scope of crop insurance. This will boost investments. Further, tractors have been exempted completely from excise duty. The rural sector will now be able to sort out some of its structural problems and these measures could translate into better demand from rural areas. The areas, which have not been convincingly addressed in the Budget 2004-05, are growth and employment. As far as the automobile sector is concerned, steps such as depreciation on investments for capacity expansion, tax exemption on R&D, excise concession on tractors and ambulances and duty reduction on steel, will further boost the booming industry. Overall, the FM has been able to balance the objectives of NCMP, revenue drive and expenditure discipline, thereby sowing the seeds for reorienting the economy towards growth and stability. The writer is Managing Director, Hero Honda Motors Ltd.
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