Industry praises Budget

PUNE, June 1: Even as the city industrialists today welcomed the union budget, the Pune Stock Exchange PSE witnessed a bearish trend with ...

PUNE, June 1: Even as the city industrialists today welcomed the union budget, the Pune Stock Exchange PSE witnessed a bearish trend with the prices of three major scrips Reliance, Tisco and SBI falling by around Rs 5 to Rs 6 at the end of the trading session. The Bombay Stock Exchange also recorded a slide by around 50 points.

PSE executive director P L Kadlaskar who termed the downward slide as an 8220;immediate8221; reaction to the budget believed that market would recover shortly. In the two-hour budget session, the PSE recorded a turnover of Rs 26 crore. The Reliance scrip which was quoted at Rs 168 in the morning session went down to Rs 165.25 in the evening session while SBI which touched a high of Rs 249 came down to Rs 238. Similarly, Tisco which touched Rs 151 in the morning session also came down to Rs 149.40.

The reactions from the Pune industry, however, were positive. Deputy chairman of the Confederation of the Indian Industry Western Region Baba and CMD of Bharat Forge Ltd Baba Kalyani termed this as a good budget.8220;While the direct policy is good, the details of simplification of Modvat credit of 5 per cent needs to be understood to feet its impact,8221; he said.

He also believed that the increase in the customs duty of 8 per cent and exemptions needed a closer look to realise its impact on the specific industry. Kalyani was disappointed with the absence of anything specific for the auto industry and hailed the step taken by the government on the disinvestment policy for PSUs besides the new policy on insurance.

Chairman and managing director of Bajaj Tempo Ltd Abhay Firodia was of the opinion that the budget was saral, provided some sanmaan but fell short of samadhan. He,however, felt that the budget was short on taking hard decisions to encourage the auto industry and was also disappointed by the tax increase in the multi-utility vehicles. 8220;The features encouraging employment and PSU retrenchment are good and should be extended to all industry,8221; he observed, adding that the simplification of Modvat availment on interplant transfers had been overlooked and the five percent retention on Modvat would complicate operations.

Senior industrialist Dr Neelkanth Kalyani was seriously concerned by the fiscal deficit and called for efforts to bring this down to an achievable level by pushing up revenue. 8220;There is no mention in the budget regarding population control,8221; he observed and underlined the need for road building programmes due to huge stocks of limestones and iron ores besides well-spread facilities to manufacture vehicles. Dr Kalyani felt that State electricity boards which were white elephants should be abolished.

Managing Director of Sandvik Asia Ltd Hans Glas said this was a promising8217; budget, especially since the government had initiated efforts to minimise bureaucratic hurdles for foreign investment with hassle-free procedures within 90 days.

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V K Sud, managing director of Hoganas India Ltd said the outlay for infrastructure development which had been increased by 35 per cent was long overdue. M Tandon, managing director of Dr Beck amp; Co I Ltd welcomed the decision to leave the tax rates unchanged for setting up a new precedent. Arvind Sonmale, deputy general manager of Export Import Bank of India praised the provisions made by the government for FDI clearances within 90 days and replacement of FERA by FEMA.