Concerned over disappointing factory output, industry today hoped that the Budget would take steps to revive demand and boost confidence among investors.
With the Index for Industrial Production (IIP) declining for the second consecutive month, industry feels that steps need to be taken on an urgent basis, especially since exports are taking a hit in a less-than-stable global situation.
“The least we expect is that the Union Budget would not consider raising any taxes or duties and would refrain from introducing new taxes. Sentiments are already reflected in the IIP figures and the CII does not want to see any announcements which would hurt industry’s confidence,” said Chandrajit Banerjee, Director-General, Confederation of Indian Industries (CII). He added that negative growth in the manufacturing sector was extremely worrisome.
Naina Lal Kidwai, President, FICCI, said that the poor show by the services sector, which has been the key growth driver of the economy, was an added concern.
“The need to revive the investment sentiment has become indispensable,” she said, while adding that the recent reform measures taken by the Government has helped notch up sentiments, but there was a need to keep the momentum going.
“It is noteworthy that the IMF too has cut down the growth projections for India for the year 2012-13 and this downward revision too is much larger than anticipated. This performance underlines the gravity of the situation and calls for policy action in a focused manner. “We are losing out on our position of being amongst the fastest growing economies in the world and this would play on the minds of global investors unless some swift action is taken by the Government to allay any such apprehensions,” Kidwai added.
Industry called for measures to contain fiscal deficit, move towards GST, provide accelerated depreciation on plant and machinery, abolishing of minimum alternate tax (MAT) on SEZ, and implementation of National Manufacturing Policy, among others.
aesha.datta@thehindu.co.in