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KOCHI, March 14

THE State Budget has evoked mixed reaction in the industry. Though the chambers of commerce and industry welcomed the initiatives in the fields of education, infrastructure development, tourism etc, there were reservations over some crucial issues, mainly the introduction of VAT regime.

The Vice-President of Cochin Chamber of Commerce and Industry, Mr N.R. Pai, complimented the initiative of the Government in setting up a Rs 50-crore fund to stabilise the prices of agricultural commodities such as tea, coffee, rubber, pepper, coconuts etc. These initiatives are timely and will definitely help in promoting the growth of these sectors, he said.

However, Mr Bharat N. Khona, President of the Indian Chamber of Commerce and Industry said that the Finance Minister had not mentioned anything about the implementation of VAT or its postponement of which the organisations of businessmen had been pleading with the Government.

Moreover, the Budget did not envisage an overall economic development of the State and no serious consideration has been given to the mounting unemployment problem, he added.

The CII said that there has been no pro-active move in developing small-scale industries or even in rationalising the sales tax structure or making VAT industry friendly, though the Budget has identified certain thrust sectors such as food processing, tourism, and traditional industry.

Though the Budget makes a mention of developing the traditional industries, nothing seems to have been done for the revival of the small-scale sector in the State. Most of the small-scale units in food processing, coir, cashew, rubber etc are facing severe crisis and the Finance Minister should have considered reduction of sales tax to 4 per cent, it was felt.

A panel discussion organised by the CII here pointed out that the State Budget should have followed the path shown by the Union Budget in lowering the excise duty in this regard. Likewise, the Budget has not given impetus to the hospitality industry.

Though the Budget has given some consideration for tourism development in the State, nothing is done for the hotel industry, which is a vital component of the tourism sector.

Since the expenditure tax of 10 per cent has been withdrawn by the Union Government to boost tourism, the State Government should also have reduced or withdrawn the 15 per cent luxury tax.

Further, liquor licence fee at Rs 15 lakh per year should be reduced or withdrawn. This is prejudicially affecting the small and medium enterprises, which have played the pivotal role in creating the Kerala brand of tourism, it was stated.

Meanwhile, former Vice-Chairman of the Coconut Development Board, Mr Joseph Alappat, described the Budget as most disappointing to coconut farmers in Kerala.

He said that there was no mention of research, development and stability of the coconut crop, which is facing innumerable problems.

The meagre Rs 50 crore set apart for the whole price stability scheme will not benefit coconut growers, he said. Likewise, there was no mention in the Budget to activate the working of the Kerafed, he added.

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