The Hindu Business Line : Chambers hail Kerala Budget

THE Cochin Chamber of Commerce and Industry has welcomed the decision of the Government to present a full Budget without invoking the vote on account provisions in the Constitution.

This would lead to a systematic expenditure planning and this has been one of the suggestions of the Chamber last year, Mr A.K. Nair, President of the Cochin Chamber, said in a press statement.

Though the deficit has come down marginally and the tax collection has gone up, the rise in expenditure on non-developmental activities such as pension, DA and servicing of debt is a cause of concern. While the decision to introduce contributory pension scheme for the staff that join from April 1 is a welcome proposal, no substantial steps seem to have been made to reduce development of the State.

The Budget, taken as a whole, did not project itself on the overall development of the State. Though Government has made proposals to generate employment, the proposals are very vague on how they are going to create employment.

The allocation of Rs 75 lakh to conduct a study on metro rail in Kochi is a welcome step and the chamber urged the Government to commission the work without further delay. Though the infrastructure development in Thiruvananthapuram is clearly spelt out, the development plans to Kochi and Kozhikode mentioned is not very clear. Similarly, the announcement to make the three cities of Kochi, Kozhikode and Thiruvananthapuram as economic growth centres is a good step, however, no specific plan is envisaged.

The proposal to set up an institute at Thiruvananthapuram to train the students for all India service examination will enable them to excel in national level examinations.

The Government's move to help the coir sector is welcome. The reduction of agricultural income tax from 60 per cent to 50 per cent is a welcome move though the industry had asked for parity with CIT rate of 35 per cent. The chamber also hailed the decision to bring down the sales tax on tea to 4 per cent at a time when the industry is going through a crisis.

However, it cautioned that the enhanced rate of luxury tax for hotels might adversely affect the tourism sector. The chamber also described that the overall effect of the Budget might not be very significant for the trade and industry.

`Welcome features': The Indian Chamber of Commerce and Industry has also welcomed the State Budget saying that the proposals to increase paddy, pepper and coconut cultivation and to attract youngsters to the agricultural field are welcome features.

The Chamber President, Mr K.S. Sabu, said that the complete tax exemption to coir and coir products and to reduce the rate of interest for the delayed payment from 24 per cent to 12 per cent are steps in the right direction.

The Finance Minister's mention that necessary provisions will be incorporated in the State VAT Act for continuing the existing sales tax exemption to industries for the notified period in full as well as the facility for payment of the tax collected during the exemption period in 60 equal monthly instalments would be of help to the industries.

Instead of refunding the tax paid by the exporters, the present system of exemption needs to be continued even under the VAT regime as otherwise it will create financial strain to exporters, Mr Sabu said.

The deficit of Rs 4,072.27 crore is a matter of concern and no worth mentioning attempt is seen in the Budget for resource mobilisation, he added.

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