“The Union Budget 2014-15 has failed to meet the expectations of the industry. Finance Minister Mr. Arun Jaitley has lost a golden opportunity of reviving the prospects of the Indian economy succumbing to decadal low GDP growth, inflation, crowding out of private investments and rising deficit bill”, said Mr. Vijay Kalantri, President, All India Association of Industries voicing his views on the NDA Budget 2014-15.
Critically examining the multiple provisions granted by Mr. Jaitley towards boosting the Indian economy Mr. Kalantri said that the various allocations announced by the Finance Ministry are meager and may fail to revive the industry expectations of 7 to 8% of GDP growth rate in the near term. The allocations need to be revived and relooked. The NDA must do away with the various schemes in way of fiscal prudence which have depicted leakages in the past. Scarce capital needs to be utilized with vigilance in social sectors such as health, education besides giving impetus to growth of manufacturing industry and infrastructural status of the economy.
Multiple rules and regulations in the form of income tax, excise duties, custom duties and service tax act as irritants in India’s growth story. They pose roadblocks towards growth by treating entrepreneurs in infant stages as criminals who are unable to comply with them.
Mr. Kalantri applauded the setting up of a Committee to build the MSME sector of the economy. Growth of the sector will generate employment, exports besides giving impetus to productivity of the manufacturing sector. However, the Government should ensure that the MSME sector meets conducive atmosphere in the form of investor friendly interest rates, exemption from taxation, access to raw material, land, etc.
Mr. Jaitley has been courageous in providing multiple sops, tax holidays and striking measures in reviving the manufacturing sector of the Indian economy. However, it fails to escape the eyes of the industry that the measures had been already initiated by respective ministries in the past. Also, the Budget stipulates no time frame for the measures announced towards boosting the infrastructural sector and manufacturing industry of the economy. It is imperative to note that time bound measures are crucial for the Indian economy which realms under the pressure of policy not witnessing timely execution.
Speaking on the taxation code of the Budget 2014-15 Mr. Kalantri said that GAAR should have been deferred for a future period while doing away with the retrospective taxation for earlier periods as well. The same may attract foreign investments into the cash sparse Indian infrastructural sector in need of US$ 1 trillion worth of investments in the next five years.
Lastly, Mr. Kalantri appreciated the bold Budget announcement of Rs 37,800 crore for national highway in line with the PM’s pledge.
July 10, 2014