The Finance Minister might have hit the right notes on agriculture and social sector upliftment but the budget has failed to bring any cheer to the corporate sector. While the additional 1 per cent cess for education will squeeze the bottom lines of companies, industry chambers CII and Ficci have come down heavily on government’s attempts to micro manage prices in the cement industry.

“The thrust on education and social sector is commendable but there is no ideological logic in what is being proposed for the cement industry. This is not in line with modern way of fiscal management and we criticise the attempts to micro manage the market,” said CII President and Ashok Leyland managing director R Seshasayee.

Ficci secretary general Dr Amit Mitra agrees. “The differential duties in the cement industry comes as a shocker and sets a very bad precedent. There surely are other ways of managing prices and this step will only encourage corporates to try and underplay their excise duty obligations,” he said.

The 1 per cent additional education cess that will compliment the existing 2 per cent cess has evoked a mixed response. While everybody admits that education is a priority area, the cess will further squeeze operating margins. “Any additional levy be it for the social sector, education or anything else puts extra pressure on us. The problem with cess is that it is not revoked once its utility is over. We are still paying the Natural Calamities Cess which was introduced after the Gujrat earthquake,” said Hero Honda Motors Ltd CEO Pawan Munjal.

... contd.