Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022503660500.htm

Back `Infrastructure may get fillip'

Our Bureau

New Delhi, Feb 24

Infrastructure sectors such as roads, ports, airports and electricity are likely to get a major focus in the coming Union Budget, finds a survey done by Assocham.

The survey, conducted in the second week of February, covered 200 CEOs countrywide on the subject "How the Budget 2006-07 will look like".

Eighty per cent of company heads polled by the survey said that the Finance Minister would aim at consolidating various initiatives already announced in the field of infrastructure. A majority of the respondents said that because of impending assembly elections in various States, the Budget would not be harsh on the common man. Nearly 60 per cent of the respondents felt that the Government could find it difficult to go in for a sharp revision in petrol and LPG prices.

They said the pressure from the supporting Left parties would surely have a bearing on the Budget.

Nearly 75 per cent of the CEOs, including bankers, agreed that the major challenge for the Finance Minister remained mobilisation of resources for enhancing spending on social sectors like such as health, education and the poverty alleviation programmes like such as the National Employment Guarantee Act.

They felt that Rs 16,205 crore collected as service tax during April 2005-January 2006 has been quite a success story. The Finance Minister is likely to depend more on this tax head and it would not be surprising if he brings more services under the net.

Majority of the respondents said that the Finance Minister might extend tax breaks on the interest on the long term fixed deposits in the wake of a wide mismatch between the growth of deposits (17 per cent) and credit (32 per cent).

They expect the Finance Minister to send a signal to the banks to keep a check on the interest rate regime. It is believed that the cash withdrawal tax introduced last year will be reviewed.

Nearly 60 per cent of the CEOs believed that the Government should aim at reducing the non-Plan expenditure if they have to comply with the Fiscal Responsibility and Budget Management Act.