Budget Reactions: Hail increase in defence allocation says Zicom Electronic

Pramoud Rao
Zicom Electronic

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"It is not a flamboyant or even a populist Budget, as many would have expected. And this is for the simple reason that early next year the country goes for the General Elections and Finance Minister P Chidambaram's chief concern seemed to be reducing fiscal deficit than curbing inflation. There was also not much for the capital markets to rejoice even though the FM indicated that he was looking for growth and looking forward to attract capital and investment in roads, highways and ports etc. The FM also thinks that inflows of funds are crucial as the country needs USD 75 billion during the fiscal year.
One good thing is that the FM has thought about the country's security and raised defense allocation from last year's Rs 1.93 lakh crore to Rs 2.03 lakh crore. Another good thing is that there is no raise in excise and customs duty which has been impacting the Rs 11, 000 crore security industry. While thinking about country's defense the FM could have also given a thought to the security of the society and created some sops for the electronics security industry, which is growing at a high rate, but is still not getting the attention it deserves and pays high taxes and duties on imports of electronic security equipment. One would have also expected tax holiday for our industry and some kind of impetus to start manufacturing units within the country."   
Also, I would like to welcome the Finance Minister's move on promoting of manufacturing of electronic goods in India under The National Electronics Policy 2012. The proposal of introducing an investment allowance of 15 % will surely attract new high value investments. This will benefit small & medium enterprise. It's quite encouraging to see FM's proposal on enhancing the refinancing capability of SIDBI from the current level of 5,000 crore to 10,000 crore per year. One would have also expected tax holiday for our industry and some kind of impetus to start manufacturing units within the country."