Merchants' Chamber of Commerce
15-B, Hemanta Basu Sarani, Kolkata - 700 001
Shri Sudesh Sonthalia, President, Merchants’ Chamber of Commerce says that the Union Budget 2011-12 seeks to ensure sustained ‘growth of the economy with social justice’, while keeping the high and persistent inflation of food items under control through higher investment in farm production, focusing on nutri-cereals output, direct credit to the small & marginal farmers, minimising huge waste of food grains & vegetables by setting up Mega Food Parks and above all a better Public Distribution System by way of issuing smart cards, coupons etc so as to reach the target sections of the population.
In the context of current political and social realities of the country, the Finance Minister seems to have chalked out broadly a balanced budget and opted for marginal reforms in tax measures and focused attention on stimulating agricultural growth, including the Food Processing Industry, delivery systems of food grains and management of huge wastage.
Shri Sonthalia has welcomed the reduction of Company Surcharge from 7.5p.c. to 5 p.c., increase in Tax Exemption for individuals from 1.6 lacs to 1.8 lacs and measures to improve farming infrastructure and storage facilities to contain the inflationary trend. However, he has carefully avoided radical steps to stimulate industrial production by allowing higher depreciation on plant and machinery and extending R&D incentives available u/s. 35(2AB) to all sections. Neither he has gone for any reduction in Corporate Tax rate, even for the SME sector from the current level, with a total abolition of Surcharge and Cess which have outlined their relevance.
Shri Sonthalia further feels that the levy of MAT on the developers of Special Economic Zones, which are considered to be growth engines for the export sector, will cause a set back and also the increase in the MAT rate to 18.5p.c. is uncalled for.
While agreeing that there is still good scope for expansion and rationalisation of Service Tax Shri Sonthalia has remarked that the Union Budget has shifted the basis for Tax Collection from ‘Cash’ to ‘Accrual’ which will create a lot of problems for the assesses and provision should be made in the Rules for neutralising the Tax on un-realised amount of the Bills.
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