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Shipping, FMCG sectors say 'nothing to cheer about'

February 26, 2010 18:31 IST

While India Inc seems to be generally pleased with the Budget, there are, however, some discordant voices with the shipping, FMCG and education sectors saying there is nothing in the Budget for them.

The shipping industry is particularly disappointed with the budget as there is "nothing to cheer us," two leading shipping sector players said.

"We are disappointed that the budget has not offered any tax relief or other incentives to the shipping industry," Shipping Corporation of India's (SCI) chairman and managing director, S S Hajara, said.

Globally, the shipping industry has been affected by recession and so some measures to boost the sector was expected from the budget, Hajara said.

"We expected some measures to boost the sector in view of the prolonged weakness in the domestic and global shipping segments," the SCI Chief said.

Essar Shipping's CFO, V Ashok, also echoed the same view, saying "there is not much (for the shipping industry) to cheer about in the budget."

The increase in minimum alternate tax is a negative, he said, adding that the hike in excise duty and customs duty on fuel would increase bunkering costs, thereby adversely impacting shipping companies.

"The only good thing is that there was some announcement on increasing investments in ports and infrastructure," Ashok said.

Overall, however, the Essar company official described the budget as a "good" one with its focus on controlling fiscal deficit.

Similarly, the FMCG sector too did not find much to cheer about in the budget with SKA Advisors' Chairman, Sunil K Alagh (former Managing Director of Britannia), saying FMCG companies could face a likely drop in profits.

However, sales targets were unlikely to be revised, he said.

"We can only hope for a good monsoon, which will help boost demand. I don't think there will be any changes in pricing due to intense competition. As a result, margins for the sector will suffer," Alagh said.

Leading education segment player, Aptech Ltd's CEO & managing director, Ninad Karpe, described the budget as a "neutral" one.

According to him, the expectations of the education industry has not been completely fulfilled.

"The increase in allotment for the sector was just by Rs 5,000-crore (Rs 50 billion) and it is not good enough. I thought they (government) would come up with a PPP scheme but this did not happen," Karpe said.

Overall, the budgetary emphasis seems to have shifted away from the "aam aadmi" towards better economic growth, he said.

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