Industry worried over budget delay

PHD Chambers of Commerce and Industry (PHDCCI) said that holding up of the smooth passage of the Finance Bill and the Railway Budget was a matter of serious concern.

"There is ample time for the Lok Sabha to pass the budget and send it for the Upper House’s approval and since already there is a consensus among political parties we are not unduly concerned about today’s development," a spokesman of the Federation of Indian Chambers of Commerce and Industry said.

Echoing similar sentiments, Associated Chambersof Commerce and Industry (ASSOCHAM) president K P Singh exuded confidence that good sense would prevail upon politicians to pass the Finance Bill and urged the political parties not to take "political mileage" from the prevailing uncertainty.

"I hope politicians do not take mileage out of the current phase of uncertainty and dump the Finance Bill," Assocham chief said. PHDCCI president Ashok Khanna pleaded to all political parties to show maturity for imperatives of the national economy and ensure early passage of the budget.

CII president said it was unclear as to whether the current stalemate would be resolved in the near future and added that the confederation believed that restoration of political stability, and removal of uncertainty, had to be ensured quickly to minimise damage to the economy.

Shah said during the last six months there had been signs of slow recovery in industrial growth and a number of steps taken towards economic reforms had brought about directed actions for increasing economicgrowth and curbing of inflation.

"Political uncertainty would definitely hurt investment sentiment and slowdown the recovery process because the policy making process had been halted and the momentum is likely to be lost," Shah said.

Khanna said only the passage of Finance Bill would send right signals to the domestic and foreign investors of the continuity of economic agenda so crucial for healthy growth of the economy.

If the Finance Bill giving effect to taxation proposals in the Budget was not passed within 75 days of the presentation of the Budget, the tax proposals would lapse.

This meant that the government had to refund the money already collected on the basis of new rates of taxes which would have complicated matters besides a possible constitutional crisis.

With the political parties agreeing to pass the Budget as it is, it was evident the ten per cent surcharge on corporate, and income tax and customs duties would continue.

Also the budget and other appropriation Bills have to be passedbefore April 28 so that 14 days was given for the Rajya Sabha to return the money bills and to get President’s assent before May 13 to meet the deadline of stipulated 75 days period of passing the Finance Bill.