Patna, Feb. 24: Entrepreneurs and businessmen of the state are not satisfied with the provision for industries in the state budget. They claim that the fraction allotted to commerce would neither encourage business nor appeal to investors.

Of the total planned outlay of Rs 28,000 crore for the next fiscal (2012-13), the state government has earmarked Rs 472.44 crore for industries. There is hardly any difference with the portion allotted in the budget for the current year (2011-12) — Rs 472 crore.

“It was expected that the government would give due consideration to the industries, particularly small and medium enterprises. But it has disappointed us,” Bihar Industries Association president KPS Keshri told The Telegraph. He added that the budget did not promise anything to industries and entrepreneurs.

However, Keshri complimented deputy chief minister Sushil Kumar Modi, who also holds finance portfolio, for presenting the third consecutive surplus budget. “It is a positive sign. The initiatives taken by the government to strengthen the agriculture sector must be lauded. But when it comes to industries, the budget has been a big let-down for entrepreneurs who were expecting some relief,” Keshri said.

Industry bodies had sought revoking of entry tax, compounding scheme of up to Rs 1 crore for industries, creation of corpus for revival of sick units, policy initiative like government purchasing from small and medium enterprises to help them out and others. “The budget does not mention any of these issues,” Keshri added.

The budget is not all bad news, though. According to it, Bihar Industrial Area Development Authority schemes would be brought under the purview of the Right to Public Service Act. “Entrepreneurs would now be able to get their work done in a specific time-frame,” Keshri said.

Another good feature is reduction in central sales tax on tiny/micro industries from two to one per cent. Keshri said: “This is a welcome development.”

He also said he was a bit worried with the allocation to the industries. “But even if the government had increased the allocation by Rs 40 crore, it would have been able to offset the inflation.”

Confederation of Indian Industry eastern region vice-chairperson Satyajit Kumar agreed with Keshri. He told The Telegraph that the government has failed to fulfil its commitment to entrepreneurs and towards promoting industrial growth in the state.

“The state government has time and again shown that industries and investments are not on its priority list,” said Kumar, who is also the owner of Shakti Sudha in Patliputra Industrial Area.

Kumar said the government has not accepted any of the suggestions made by the industries during the pre-budget consultation meet with the deputy chief minister. The government has also not accepted the suggestions made by experts, who took part in the recently concluded Global Summit for Changing Bihar. The experts had said the state would not progress unless there was industrial investment.

In contrast to others, Bihar Chamber of Commerce has warmly welcomed the budget. Its president, O.P. Sah, said: “The budget of the state is committed to foster integrated development. It aims to make the economic status of Bihar stronger and accelerate the industrial growth.”

He also congratulated chief minister Nitish Kumar and his deputy Sushil Kumar Modi for “presenting a progressive and development-oriented budget”.

Sah said the government’s decision to accord top priority to the agriculture sector and making an allocation of Rs 9,508 crore for the first phase of the Agriculture Road Map was laudable. “This will provide the necessary boost to the agriculture sector in Bihar,” he said.

Not everyone agreed with Sah though.

Builders’ Association of India (BAI), Patna chapter, was unhappy over the government’s decision to levy one per cent tax under compounding scheme on the total sale value of residential and commercial buildings.

Sachin Chandra, chairperson, BAI, Patna chapter, told The Telegraph: “The government’s move would certainly have a negative impact on the construction sector which has been posting a robust growth for the past several years. The central government in July 2010 levied service tax of 2.57 per cent on the sector. Now, the state government has imposed 1 per cent. It would certainly increase the price of flats.”

Those who wish to buy cars and two-wheelers would also have to shell out more. While the tax on motorbikes and four-wheelers priced up to Rs 4 lakh would have a tax of 6 per cent on them, those purchasing more expensive cars would have to pay 7 per cent levy. Earlier, there was a flat rate of 5 per cent on the prices of all vehicles.

Volkswagen, Bihar, sales head Rajan Verma said it would not have much impact on car buyers but it might affect motorbike sales.