HYDERABAD: The state budget for 2012-13, presented by finance minister Anam Ramanarayana Reddy on Friday, has evoked mixed reactions from business and industry. While a section of industry has termed it discouraging as it is unlikely to meet the growth targets, others have welcomed the initiatives that focus on employment and agriculture.
According to estimates, the GSDP for 2011-12 has been revised to 6.1 per cent from 8.5 per centthat had been forecast. This is well below the national GDP, which is pegged at 6.8 per cent. Likewise, the industrial growth rate has been revised from 9.61 to 7.33 per cent.
"Clearly, these falling growth rates indicate that the overall budget has to be formulated in such a way that the economy grows at expected rates. Instead of a proportionate increase, the allocation to industry has been reduced to `633 crore as against `858 crore earmarked for the outgoing year. This is insufficient to meet subsidies and incentives payable to industries. Overall, the budget is unlikely to meet the expected growth targets," said VS Raju, president of the Federation of AP Chamber of Commerce and Industry (Fapcci).
With the state reeling under a severe power crisis,
`5,937 crore has been allocated for the power sector. According to Fapcci, this will barely meet the power subsidy to farmers and the interest paid by Discoms towards outstanding loans.
"The industry's demand for power has increased multifold and the proposed additional capacity increase of 560 MW may not be sufficient, especially when more industrial investments are on the cards,” said Jay Galla, chairman of the AP chapter of Confederation of Indian Industry (CII) and managing director of Amara Raja Batteries Ltd.
At the same time, the CII welcomed the special budgetary allocation of `777 crore to various departments under Rajiv Yuva Kiranulu scheme which aims to offer 15 lakh jobs. Commenting on the government's initiative to develop an international airport at Tirupati, Galla said, "There are also other locations like Vijayawada and the government must build connectivity to tier II and III cities.”
He commended the initiatives for the farming community such as interest-free loans up to `1 lakh and credit support up to `1,075 crore and interest-free loans to ten lakh self-employed groups. But he expressed concern that over 63 per cent of the total expenditure is under non-plan expenditure, which may not be a healthy sign in the long-run.
“The property tax hike in areas like Hyderabad is 100 to 800 per cent. This needs to be rationalised based on industry's paying capacity”, he suggested.