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Bangalore chamber hails Budget proposals
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But not happy over dividend distribution tax hike
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MR VENKAT KEDLAYA, BCIC PRESIDENT
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Bangalore
March 1
The President of the Bangalore Chamber of Commerce and Industry (BCIC), Mr Venkat Kedlaya, while welcoming the Budget proposals said that the stability shown in and the long-term measures initiated to contain inflation were good. The reduction in duty on fuels is a pointer to the seriousness of containing the prices.
The Chamber also commended the Finance Minister Mr P. Chidambaram's strategy that the reduction in poverty required faster growth. The initiatives to revive the agricultural sector are most welcome.
"We are encouraged by the success of VAT and the move to phase out CST with 1 per cent reduction this year."
However, the BCIC is disappointed with the rate hike of dividend distribution tax as this will affect the industry.
The extension of MAT to include the IT companies, and the proposed FBT on ESOPs together with the dividend distribution tax, will have a negative impact on the technology sector.
Opening up of ITIs (industrial training institutes) to private-public partnership is a step in the right direction. The BCIC, which had taken up the task of upgradation of ITIS in Karnataka, would redouble its efforts making the institution Centres of Excellence.
Initiatives through National Bank for Agriculture and Rural Development and Rural Infrastructure Development Fund was welcome, Mr Kedlaya said, adding that BCIC believed that all educational institutions at primary, secondary and higher levels should be improved and welcomed the allocation of more resources to the sector.
However, he felt that the use of cess, which is a device to raise specific project fund in the short term was not appropriate.
The Federation of Karnataka Chambers of Commerce and Industry commended the Finance Minister's efforts to address the social sector issues though higher allocations and schemes such as education, healthcare, water system, and rural development.
The proposal permitting the State Governments to go for tax-free bonds would be beneficial to public utilities like Greater Bangalore Mahanagara Palike.
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