CHENNAI/COIMBATORE: The union government’s budget announcements drew mixed reactions from industrial organisations in Tamil Nadu.

While industry insiders welcomed the Union Budget’s emphasis on capital expenditure, manufacturing and MSME support, they flagged gaps in tax reliefs and incentives needed to spur small business modernisation.

The Tamil Nadu Small and Micro Industries Association (TANSTIA) president S Vasudevan said the proposed capital outlay of Rs 12.2 lakh crore would help sustain demand for ancillary and supplier industries across the state.

The association welcomed sector-specific initiatives such as mega textile parks, the Rs 10,000-crore container manufacturing scheme and technology upgradation support, noting that these could enable smaller units to integrate with global supply chains.

However, TANSTIA said the absence of direct tax relief and enhanced depreciation benefits remained a concern at a time of rising input and compliance costs.

Expressing disappointment over budget announcements for MSMEs, J James, president of the Tamil Nadu Association of Cottage and Micro Enterprises (TACT), said, “The budget allocation for MSMEs is Rs 10,000 crore, when the industry expected 1% of the GDP. This is not sufficient for growth of MSMEs. Our expectations are that the 15% subsidy for MSMEs, which was discontinued, should be restored.”