Biratnagar, June 3 : The Association of Industries, Morang has described as timely and positive the increase in the income tax exemption level and scrapping of surcharges as stated in the budget for fiscal year 2000/2001.

The association, in its reaction to the new budget, hailed the commitment to strict adherence to the policy of purchasing indigenous products for HMG and other governmental bodies from the coming fiscal year in order to encouraging national industries.

The association expressed hope that the system of permanent account numbers to be introduced in future will be a positive thing in the industrial sector and termed the ideal of industrialisation of the agricultural sector to giving it a new direction as positive also.

The proposal for setting up export promotion zones at Biratnagar, Birgunj and Bhairawa is encouraging, the association remarked but added that the provision for taxing income from exports has given rise to controversy as clause 15 of the industrial enterprises act rules out such taxation.

Scrapping of the provision for demand export contrary to the previous provision under which local industries can supply construction material for ongoing developmental project through global competition is a negative aspect of the budget, it also said.

The plastic industries are in confusion since the proposed budget is unclear whether export-oriented plastic industries should import raw material through a bank guarantee or bonded warehouses, it is also stated in the reaction signed by association chairman Shushil Kumar Dhanawat.

The association further says that the removal of provisions for bank guarantees introduced by the government in lieu of a disbursement facility of 60 days under a one window system which had failed because of its impracticability for export-oriented industries has discouraged exporters.