Mar 15, 2012, 11.49 AM IST

Budget Expectations: Industry keen on Budget boost to capex cycle, says Thermax

MS Unnikrishnan, MD, Thermax Ltd stated that the industry was keen on measures to control fiscal deficit and check inflation.

Markets And Macros at 11:00 am

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In an interview with CNBC-TV18, MS Unnikrishnan, managing director, Thermax Ltd voiced the aspirations of industry in the Budget. He stated that the industry was keen on measures to control fiscal deficit and check inflation which would boost the capex cycle in the country. Unnikrishnan was also hopeful that the cess on imported power equipment would be implemented in the Budget.

Here's an edited transcript of his interview with CNBC-TV18. Also watch the accompanying video.

Q:Is there a possibility of the 19% duty on imported power equipment in the Budget?

A: Yes, we are looking forward to that. In the last cabinet meeting, it was to be included in the Budget..

Q:What are your other expectations from the Budget?

A: The industry expects a control on the fiscal deficit and a realistic estimate of growth potential. There are also concerns on the increase in the fuel prices. The industry doesn�t mind more taxes, but there should be an indication to boost the Indian investment cycle, which has been consistently falling for the past four quarters. The RBI cut in CRR is certainly positive step in changing this trend.

Expectations are also high on accelerating investment in infrastructure including the power industry.

Q:You expect the budget to encourage investment and boost the capex cycle?

A: Absolutely right.

Q: Can you list your expectations for capex?

A: Capex reacts to increased consumption and investment. So control on inflation which encourages consumption is vital. Any support, apart from tax concessions, focused on investment are eagerly looked forward to. Also is the need for allocation of funds for specified industries vital for the nation like cement, steel and petroleum.

The industry is also keen to rid of the fear of sudden increase in interest rates. Industry participants hope that the finance minister specify the process and timelines of the implementation of the proposals listed in the Budget.

An increase in the allocation for the National Solar Mission needs to be increased and support be provided for other renewable sources like geothermal energy.

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