FIEO organises discussions on
Union Budget at Mysore, Mangalore
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Sitting on the dais, are from right Mr. T.A.Vasudeva, Chairman, Mysore Branch Taxation Executives Association of Mysore; Mr. C.A. Ebey Eapen, Chairman, Mysore Chapter, The Institute of Chartered Accounts of India; Mr. P M Saleem, Chief Commissioner of Customs, Central Excise and Service Tax; Mr. G Shivadas, Advocate, Lakshmi Kumaran & Sridharan; Mr. D D Bhat, Chairman, Mysore Chapter, The Institute of Company Secretaries of India; and Mr. K Unnikrishnan, Jt. Director, FIEO. |
Over the years with the foreign exchange reserves consistently rising at a healthy phase, the Union Government has been viewing export not only as the engine of foreign exchange growth, but also as the vehicle of employment generation. During 2004-05, our exports at US$ 78 billion generated about 160 lakh employments. It is projected that the export industry will create a total employment of about 296 lakhs by 2009-10 through a turnover of US$ 150 billion. This will be possible only if the Agri-export grew at an average of 20% per annum as against 10% at the moment and for this to happen the Union Finance Ministry needs to make supplementary allocation to bring the Indian agri-export industry on par with global standards. The Convenor of FIEO Committee on Agro Exports and AEZ, Mr. Walter D’Souza observed this while analyzing the Union Budget 2007-08 at a meeting orgnaised by the Karnataka Chapter of FIEO at Mangalore on 5th March 2007. The discussion on Impact of Union Budget on Economy was organaised in association with Kanara Chamber of Commerce & Industry and was joined by around 45 exporters of the region.
Mr. D’Souza further said as per the Central Statistical Organization (CSO), 65% of the Indian population engaged in agriculture accounts for just about 18.5% of the GDP now. This has substantially come down from the all time high of 24%. Against this backdrop, it was desirable for the Finance Minister to have made result oriented large-scale budgetary allocations for critical agricultural infrastructure developments exclusively to strengthen agro exports, added Mr. D’Souza. He, however, welcomed the reduction of import duty from 7.5% to 5% on equipments, plant & machinery meant for drip irrigation, sprinklers, food processing machinery, etc. and 100% central excise exemption for the food processing sector and generation of bio-diesel. He also welcomed the proposal to put in place a financial mechanism for cashew, coffee, rubber, spices and coconut on line with the rejuvenation scheme for tea. "These masseurs will sharpen the competitive edge of Indian agro exports in the global markets," he observed.
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The Convenor further said that there was a need for critical agricultural infrastructure development, exclusively to strengthen agro exports. He requested the Union Government to either convert the existing technical training institutes or to set up new agriculture training institutes to generate more employable rural population and said it would increase output and profits for agricultural sector which is very crucial. Mr. John Prasad Menezes, President, Kanara Chamber of Commerce & Industry during his address said that the proposal of the Union Finance Minister to cut duty on import of dredgers would help in the development of minor ports in Karnataka. "The proposal to make the import of dredgers duty-free will help in the development of minor ports as they require capital and maintenance dredging |
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At Managalore: Mr. Walter D’Souza, Convenor, FIEO Committee on Agro Exports and AEZ delivering the welcome address. On the dais, from left, are Mr. M Ahmed Bava, Treasurer, KCCI; Mr. K Unnikrishnan, Jt. Director, FIEO; Mr. G Shivadas, Advocate, Lakshmi Kumaran & Sridharan; Mr. John Prasad Menezes, President, KCCI; Mr. K N Prabhu, Vice President, KCCI; and Mr. Shekhar Pujari, Hony. Secretary, KCCI. |
activities," he said. He added that Karnataka had more than 300 km of coastline and there was a need for more minor ports in the State.
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Mr G. Shivadas, advocate, Lakshmi Kumaran and Sridharan, Bangalore on this occasion analyzed various tax proposals in the Budget and said today’s government had turned more pro-active and pro-trade than a decade ago. On 3rd March 2007, the Karnataka Chapter of FIEO had organized a similar discussion at Mysore in association with the Institute of Company Secretaries of India, Institute of Chartered Accounts of India and Taxation Executives Association. Here more than 80 exporters from Mysore joined the discussion with Mr. P M Saleem, IRS, Commissioner of Customs, Central Excise and Service Tax, Mysore and Mr. G Shivadass, Advocate, Lakshmi Kumaran & Sridharan, Bangalore along with FIEO officials. |
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A view of the participants |
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A Sakthivel Vice President, FIEO & President, Tirupur Exporters’ Association
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I thank the Finance Minister for increasing the provision of funds under TUFS to Rs. 911 crore from Rs. 535 crore in 2006-07 and extending it to the 11th Plan. Increased outlay for integrated textile parks from Rs.189 crore last year to Rs. 425 crore would further boost the textile industry. The extension of TUF scheme alongwith reduction of peak rate of customs duty from 12.5 per cent to 10 per cent for capital goods would help modernization of textile industry. Reduction in customs duty on polyester |
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fibres and yarns from 10 per cent to 7.5 per cent would further help the garment sector. I also compliment Mr. Chidambaram for maintaining the general CENVAT rate and service tax at the same level and for reducing Central Sales Tax from 4 to 3 %. However, I am disappointed with the continuance of fringe benefit tax and increase in education cess from 2 to 3 %. Extension of service tax for renting of immovable property for use in commercial business is another major irritant, as it would have an increasing effect on production cost across the board. |
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Dr. R. K. Dhawan Chairman, FIEO (Northern Region)
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I am disappointed with the imposition of Minimum Alternative Tax (MAT) on the units in the Free Trade Zones (FTZs), Electronic Hardware Technology Parks (EHTP) and Software Technology Parks (STP) under Section 10A and the 100% EOUs under Section 10B of the Income Tax Act. The imposition of MAT at this juncture, when the tax holiday for these units is already approaching an end under the Sunset Clause, tantamount to reneging on the commitments made by the Government to the trade & industry including the IT sector. The proposal is bound to weaken the competitiveness of the exiting units which are already facing high transaction costs and also discourage |
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fresh investments in these sectors. When competitor countries like Malaysia, Indonesia and China are offering attractive tax havens to investors, imposition of MAT would drive away investments from our country. The new levy would slap an additional tax burden of 11.22% for the units. |
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Amit Goyal President, Confederation of Indian Apparel Exporte
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The Finance Minister has tried to balance the tax structure and has succeeded in not giving in to the pressure of too many populist schemes. The extension of the Technology Upgradation Fund (TUF) scheme upto 2012 is a welcome step as it was a long standing demand of the industry. Increased outlay for apparel and textile parks from Rs. 150 crore to Rs. 425 crore would help Indian exporters keep pace with global trends. However, one of the major setbacks is the lack of any mechanism through which the exporters could claim a refund. It is a pity that Indian exporters are burdened with more and more taxes every year. Overall, I find the budget an ‘average’ one. |
