Sector highlights

• Special fund for the hosiery sector, knowledge based industry

• Support funding of Rs. 500 crores by SIDBI to boost SSI sector

IMPACT: Positive

The government has taken out 108 items from reserved list and not increased the turnover limit from 3 crore to 5 crore and excise exemption limit over one crore is a matter of concern and should be re-considered as this will boost the SSI sector
Vijay Kalantri, President, AIAI

CEMENT

• Focus on core sector projects to boost sales

• SPV for urban infrastructure is positive

• Bharat Nirman to see inevstment in roads, irrigation, housing

IMPACT: Positive

ACC Rs 367, up 1.71 %, Guajrat Ambuja Rs 449.35, up 3.57 %.

There has not been any change in the raw material costs for cement industry. At the same time, the continued focus on infrastructure will support growth in cement industry. But the announcements should be translated into action.
AK Jain, ED – marketing, ACC

PHARMA & BIOTECH

• Corpus fund of Rs 150 crore for R&D

• Abatement to be based on 40 per cent of MRP.

• Customs reduced from 20 to 5 per cent on nine specified equipment used in biotech

• Customs exemption on capital goods and raw materials in government and CSIR-funded R&D projects extended to those funded by ICMR, ICAR, UGC, DRDO or AICTE.

• R&D facilities allowed weighted deduction of 150 per cnt on expenditure, extended by two years to April 1, 2007.

• Sops effective from April 1, 2006.

• Scientific research allowed 100 per cent depreciation of profits for 10 years.

IMPACT: Neutral

We will not be able to provide quality healthcare in India without a firmer regulatory framework. The exemption on R&D facilities and the Rs 150 crore corpus fund were exepected and positive steps, in their own small way.
Shivinder Mohan Singh, joint-MD, Fortis Healthcare

SUGAR

• Loans from the Sugar Development Fund at two percentage points below the bank rate

• Sugar factories that were operational in 2002-03 will be assisted to restructure.

• IBA and NABARD to work out a scheme under which sugar factories can renegotiate rate on interest on their past loans.

IMPACT: positive.

Sugar industry being allowed to renegotiate its past loans has opened the doors for others in the plantation industry like coffee and tea.
Anil Bhandari, president of the United Planters’ Association of South India

SEZS

• Amendment to the Income Tax Act brings caps new investments and places a sunset clause in the IT Act

• No tax exemption to undertakings starting work after March 31, 2009 in Special Economic Zones.

IMPACT: Negative

There should be no sunset clause for IT exemption on EOUs. Besides, the new multi-product SEZs are permitted only in an area of 1,000 hectares or above. If fresh investments after a deadline are not IT exempt, the large-sized SEZs with high gestation period will not attract investments.
Sharad Jaipuria, Chairman, Export Promotion Council for EOUs and SEZs (EPCES)