Dear Friends,

The Union Budget for the year 2012-13 was announced by the Hon'ble Minister for Finance Mr. Pranab Mukherjee in Parliament on the 16th of March 2012.

The Cochin Chamber of Commerce & Industry has welcomed the focus areas mentioned in the Budget viz. Focus on domestic investments and driving up growth, Stress on rapid revival in private sector investment, Emphasis on removing supply die bottlenecks in sectors like agriculture, energy, etc. and the intent to expedite coordinated efforts to improve governance, transparency and address the problem of black money.

The increase in the plan outlay for agriculture and the fact that irrigation and dams will be eligible for special funding we feel, is appropriate. The National Mission for food processing and the increased spending proposed for infrastructure is a most welcome initiative.

The promise of tax incentives for new investors is a good move, considering that the share of household savings invested into the stock markets has declined. We especially welcome the announcement that the Direct Taxes Code " is to be implemented at the earliest"and that the Goods and Services Tax, would be operational by August 2012. The desire to bring down subsidies to a level of 1.7% of the GDP over the next three years is ambitious. So too the divestment target pegged at Rs 30,000 crore.

The announcement that the Government will strive to remove bottlenecks in agriculture, energy, transport, power, highways etc. if implemented in letter and spirit, will have a huge positive impact on economic growth. The fact that there will be no change in tax structure for corporates is welcome. The decision to lower Withholding tax on power, airlines, road and brides, ports and shipyard, fertilisers, dams and affordable houses is a positive step that could fuel growth in these sectors.

However the Chamber is disappointed at the meagre hike in the Income Tax exemption limit and the announcement that Service tax rates are to be hiked from 10 per cent to 12 per cent. The decision to hike excise rates from 10 to 12 percent too was unexpected . Ensuring fiscal prudence and addressing the inefficiencies in the system should have been the solution rather than an increase in tax rates as announced. We sincerely urge the Finance Minister to reconsider this decision.

Kind Regards,

P. Narayan
President

The Cochin Chamber of Commerce & Industry jointly with the Open University, Malaysia and Straits Academy, India had entered into a Memorandum of Understanding (MoU) to offer a Professional Diploma Course in Freight Logistics (PDFL). This initiative is intended to help young graduates get trained for jobs in the fast growing Shipping and Logistics sector. The signatories to the MoU were Dr Anuwar Ali, Vice Chancellor of the Open University of Malaysia, Mr. P. Narayan, President of the Cochin Chamber of Commerce and Industry and Mr. Vikaraman Pillai, CEO of Straits Academy. The signing ceremony was held in the Chamber Office.

A Press Conference was organized by the Chamber on 1st March 2012 at the Ernakulam Press Club to announce the launch of the Professional Diploma in Freight Logistics Programme in association with the Open University, Malaysia and Straits Academy, India.

The Learning Centre will be facilitated by The Cochin Chamber of Commerce and Industry and the lectures for the Diploma programme will be handled by Senior Level Industry and Subject experts from the Shipping and Freight Logistics Industries in India and Malaysia. The PDFL programme is open to graduates in any discipline and is aimed at training youngsters interested in pursuing a career in the field of the Shipping and Freight Logistics industry.

The Professional Diploma in Freight Logistics (PDFL) Programme was officially launched at a Seminar on Saturday, 3rd March 2012 at the Hotel Abad Plaza, Ernakulam. The Chief Guest on the occasion was Mr. Paul Antony, IAS, Chairman of Cochin Port Trust. Other dignitaries present included Mr. P. Narayan, President, Cochin Chamber of Commerce and Industry, Professor Selvaraj Oyyan Pillay, Director of Institute of Professional Development, Open University Malaysia and Mr. Vikaraman Pillai, C.E.O. of Straits Academy Malaysia.

The official launch was followed by a Seminar on 'Freight Logistics: Career Opportunities Ahead". The Seminar intended for students and professionals seeking a career in the logistics industry gave a broad outline on the range of service providers in the industry and the possibilities that it holds for job seekers. The PDFL course will commence from the 4th of June 2012

The Cochin Chamber of Commerce and Industry organized a Session on Union Budget Analysis on 28th March, 2012, at The Center Hotel, Panampilly Nagar, Cochin. The speaker for the session was Mr. Homi P. Ranina, a Senior Supreme Court Advocate and an eminent Tax Expert.

Mr. Ranina explained the budget and its implications in a simple yet highly informative and effective manner. The session was attended by Chamber Members, Chartered Accountants, Cost and Work Accountants, Businessmen, Business School Students, N.R.I.'s and Home makers.

• Budget identifies five objectives relating to growth recovery, private investment, supply bottlenecks, malnutrition and governance matters
• GDP growth to be 7.6 per cent (+ 0.25 percent) during 2012-13
• Amendment to the FRBM Act proposed as part of Finance Bill. New concepts of "Effective Revenue Deficit" and "Medium Term Expenditure Framework" introduced
• Central subsidies to be kept under 2 per cent of GDP; to be further brought down to 1.75 per cent of GDP over the next 3 years.
• Proposed: Mobile based fertilizer management system; LPG transparency portal; scaling up and rolling out of Aadhar enabled payment for government schemes in at least 50 districts.
• Rs. 30,000 crore to be raised through disinvestment
• Efforts to reach broadbased consensus on FDI in multi-brand retail
• Rajiv Gandhi Equity Saving Scheme: to allow income tax deduction to retail investors on investing in equities
• Rs. 15,888 crore to be provided for capitalization of public sector banks and financial institutions
• A central "Know Your Customer" depository to be developed
• Swabhimaan: remaining habitations to be covered; to be extended to more habitations; ultra small branches to be set up in Swabhimaan habitations
• Investment in 12th Plan in infrastructure to go uptoRs. 50,00,000 crore; half of this is expected from private sector
• Tax Free Bonds of Rs. 60,000 crore to be allowed for financial infrastructure projects
• Allocation of Road Transport and Highways Ministry enhanced by 14 per cent to Rs. 25,360 crore
• Financial package of Rs. 3,884 crore for waiver of loans to handloom weavers and their cooperative societies; mega handloom clusters in Andhra, Jharkhand; weaver service centres in Mizoram, Nagaland and Jharkhand ; powerloom mega cluster in Maharashtra; Rs. 500 crore pilot schemes for geo-textiles in North-Eastern region
• Rs. 5,000 crore India Opportunities Venture Fund to help small enterprises
• Allocation to agriculture enhanced; RKVY gets Rs. 9,217 crore; BGREI gets Rs. 1,000 crore; Rs.2242 crore project to improve dairy productivity; Rs. 500 crore for coastal aquaculture
• Various other agricultural activities merged into 5 missions
• Target for agricultural credit raised to Rs. 5,75,000 crore
• Interest subvention for short-term crop loans to farmers at 7 per cent interest continues; additional 3 per cent for prompt paying farmers
• Rs. 200 crore for awards to incentivise agricultural research
• Provisions under rural housing fund increased to Rs. 4,000 crore from Rs. 3,000 crore
• Interest subvention of 1 percent on housing loans uptoRs. 15 lakh extended for one more year
• AIBP allocation raised by 13 per cent to Rs. 14,242 crore
• National Mission on Food Processing to be started in cooperation with State Governments
• Scheduled Caste Sub Plan allocation increases by 18 per cent to Rs. 37,113 crore; Tribal Sub Plan by 17.6 per cent to Rs. 21,710 crore
• Multi-sectoralprogramme to address maternal and child malnutrition in 200 high burden districts
• 58 per cent rise in allocation to ICDS, at Rs. 15,850 crore
• Rural drinking water and sanitation gets 27 per cent rise in allocation to Rs. 14,000 crore; PMGSY gets 20 per cent rise to Rs. 24,000 crore
• Projects covering length of 8800 km to be awarded under NHDP against 7,300 km during 2011-12
• RTE-SSA gets Rs. 25,555 crore allocation, showing an increase of 21 per cent; 6000 schools to be set up at block level as model schools in the 12th Plan; Credit Guarantee Fund to be set up for better flow of credit to students
• National Urban Health Mission is being launched
• 34 per cent increase in allocation to National Rural Livelihood Mission, to Rs. 3915 crore
• Rs. 1000 crore allocated for National Skill Development Fund
• Bharat Livelihood Foundation to be established to support livelihood interventions particularly in tribal areas
• Widow pension and disability pension raised from Rs. 200 to Rs. 300 per month
• Grant on death of primary breadwinner of a BPL family in the age group 18-64 years doubled to Rs. 20,000
• Defence services get Rs. 193407 crore; any further requirement to be met
• 4000 residential quarters to be constructed for Central Armed Police Forces
• UID-Aadhar to get adequate funds for enrolment of 40 crore persons, in addition to the 20 crore persons already enrolled
• White Paper on Black Money to be laid in the current session of Parliament
• Tax proposals mark progress in the direction of movement towards DTC and GST
• Income tax exemption limit raised from Rs.1,80,000 to Rs.2,00,000; upper limit of 20 per cent tax slab raised from Rs.8 lakh to Rs.10 lakh
• Interest from savings bank accounts deductible upto Rs.10,000; deduction of upto Rs.5,000 for preventive health check-up
• Senior citizens without business income exempt from advance tax
• Investment linked deduction of capital expenditure enhanced for certain businesses; new sectors eligible for investment linked deduction
• Turnover limit for compulsory tax audit for SMEs raised from Rs.60 lakh to Rs.1 crore
• STT on cash delivery reduced by 25 per cent to 0.1%
• General Anti Avoidance Rule being introduced to counter aggressive tax avoidance
• A number of measures proposed to deter generation and use of unaccounted money
• All services to attract service tax except those in the negative list
• Central Excise and Service Tax being harmonized
• Standard rate of excise duty raised from 10 per cent to 12 per cent; service tax rates raised from 10 per cent to 12 per cent; no change in peak customs duty of 10 per cent on non-agricultural goods
• Relief in indirect taxes to sectors under stress; agriculture, infrastructure, mining, railways, roads, civil aviation, manufacturing, health and nutrition, and environment get duty relief
• Certain cigarettes and bidis attract higher excise duty; large cars attract higher customs duty
• Excise imposed on unbranded jewellery also; measures to minimize impact on small artisans and goldsmiths; branded silver jewellery exempted from excise duty
• Net gain of Rs.41,440 crore due to taxation proposals
• Total expenditure budgeted at Rs. 14,90,925 crore; plan expenditure at Rs. 5,21,025 crore – 18 per cent higher than 2011-12 budget; non plan expenditure at Rs. 9,69,900 crore
• Fiscal deficit targeted at 5.1 per cent of GDP, as against 5.9 per cent in revised estimates for 2011-12
• Central Government debt at 45.5 per cent of GDP as compared to Thirteenth Finance Commission target of 50.5 per cent
• Medium-term Expenditure Framework Statement to be introduced; will set forth 3-year rolling target for expenditure indicators

The Kerala Finance Minister, Mr. K.M. Mani presented the State Budget for the year 2012-13 on the 19th March 2012.

The major highlights of the budget are listed below.

• Japan Drinking Water Project to be implemented in Ernakulam
• Drinking Water Project in Harippad panchayat
• 50 crores for protecting dam in Mullaperiyar
• Institute of global standard for disaster management
• Engineering colleges at Muttathara in Thiruvananthapuram and Athani in Thrissur
• 84 crores for functioning of Kudumbashree
• Rs 50 crores for modern fish markets
• Rs 1100 as kit allowance for sports persons
• Ayah's salary will rise to Rs 600
• Old age pension for above 80 years increased to Rs 900
• 50 crores for Kannur airport
• Air strips for all districts
• Journalists pension made Rs 4500
• 5 crores for centre for public research in capital city
• 1 crore for Pineapple Mission
• 25 crores for Sabarimala development
• 56 made pension age
• 750 crores for basic infrastructure
• Expense for pension, salary rises
• Land for Kozhikode airport to be acquired
• Kerala Innovation Mission to be formed
• 224 crores for Vizhinjam project
• 45 crores for Green House project in panchayats
• Hi Tech agriculture methods proposed
• Two rice bio parks to be installed in Kuttanad and Palakkad
• 25 crores for Rapid Force Project in Thiruvananthapuram and Kottayam
• New airports in Idukki, Wayanad
• Higher allocation for agriculture, industrial sectors
• 150 crores for Kochi Metro Rail
• 50 Crores for initial development of Thiruvananthauram - Kasargod High Speed Rail
• Employees' retirement age raised to 56
• 45 crores for each panchayat for developing 'a pond in every panchayat' project
• 20 crores for Kozhikode Mono Rail
• 15 crores for Coconut biopark
• 25 crores for farmers in Wayanad
• Widow pension raised to Rs 525 and handicapped pension to Rs 700
• Ayurveda University to setup in Kotakkkal
• 45 crores for green houses in each panchayath
• Constituency development fund allocation raised to 705 crores
• Proposal for film city in Ottapalam
• Cigarette, Liquor and tobacco products to cost more
• New medical college for Wayanad, Kollam and Palakkad
• 10 crores for setting up coir village
• 108 ambulance facility for each districts
• 100 crores for KINFRA
• 56 crores for development of coastal highways
• 5 crores for IIT project in Palakkad
• Vehicle tax to be made proportional to vehicle price
• Special force to protect women in Kerala

The Cochin Chamber of Commerce and Industry has come out with the latest edition of its ‘Business Directory.’ This publication, we feel will be useful to the business community at large.

The Business Directory can be had from the Chamber Office.