Coimbatore: The union budget 2016-17 is comprehensive, meets expectations of industries, fulfills rural and domestic demand and that the economic reforms will boost the growth, are the highlight of the responses by industry representatives here.
M. Senthilkumar, chairman of the Southern India Mills’ Association (SIMA) welcomed the nine pillars of growth trajectory in the budget, aimed at developing infrastructure, skill improvement, agriculture development, health care, social development, education, etc.
“I thank the government for continuing optional Cenvat route on cotton textiles which was the main demand of the association,” said Senthilkumar.
On the allocation of Rs 1480 crore for technology upgradation fund scheme, the industry is very happy. The SIMA has also welcomed the reduction of basic customs duty on MMF from 5 per cent to 2.5 per cent though the association had demanded total withdrawal.
“The reduction in customs duty on MMF would marginally improve the competitiveness of the MMF and their blended textile manufacturers in the country. But government could have avoided imposing 2 per cent central excise duty without Cenvat credit facility or 12.5 per cent central excise duty with Cenvat credit facility on branded ready-made garments and made-ups materials priced above 1000,” he added.
The Tirupur Exporters’ Association (TEA) said that the focus of infrastructure and initiatives for ease of doing business will go a long way in improving the economy as well as reducing the transaction cost.
“MSME is the back bone of Indian Industry and focusing the MSME as well as encouraging the start-ups will help the economy to achieve the desired GDP growth,” said president of TIA, Dr A. Sakthivel.
However he expressed his concern on the proposal of excise duty of branded readymade garments and made up articles of textiles with the retail sale price of more than Rs 1000. This will adversely affect the industry and also difficult to administer, he said.
TIA welcomed the proposal for contribution of government 8.33 per cent for all new employees enrolling in EPFO for the first three years of their employment.
“Budget 2016-17 is well-balanced and comprehensively addresses all aspects that industry was looking for, including revitalizing the rural economy, infrastructure build-up, relief for stressed assets, and simplification of taxes,” said Nethra J.S. Kumar, chairperson of Confederation of Indian Industry (CII) Coimbatore zone.
New manufacturing companies incorporated on or after March 1, 2016, have been given an option to be taxed at 25 per cent surcharge and cess.
In addition to this, the corporate tax rate for the next financial year for relatively small enterprises has been lowered to 29 per cent plus surcharge and cess. This will encourage entrepreneurship and employment creation, said Kumar.