Financial Daily from THE HINDU group of publications
Wednesday, Jan 09, 2002
Industry & Economy - Budget
India Inc wants customs tariff levels to stay
The Vice-Chairman of Reliance, Mr Mukesh Ambani, greeting the Chairman of Bombay Dyeing, Mr Nusli Wadia ,at the pre-Budget meeting with the Finance Minister, Mr Yashwant Sinha, in the Capital on Tuesday.
NEW DELHI, Jan. 8
INDIA Inc has made out a case to the Government to maintain status quo on the customs tariff levels for the next one year and to go easy on bringing down the tariff walls in the Budget.
Captains of Indian industry also sought reduction of corporate tax rates from 35 per cent to 30 per cent besides seeking the withdrawal of the Minimum Alternate Tax (MAT) in their pre-Budget interaction with the Finance Minister, Mr Yashwant Sinha, here on Tuesday.
These suggestions from the captains of industry come at a time when the manufacturing sector is going through a difficult phase. Mr.Sinha has already expressed his disinclination to provide sectoral protection to domestic industry in a liberalising economy.
The Government had in last year's Budget committed to reducing peak tariff rates to 20 per cent in three years.
While some industrialists suggested that corporate tax rates should always be in line with the personal income-tax rates, others merely said that the rate be brought down to 30 per cent.
Speaking to mediapersons after the interaction, the President of the Confederation of Indian Industry (CII), Mr Sanjiv Goenka, said that the chamber has asked the Finance Minister to maintain status quo on the tariff levels for another one year. ``We have said this in view of the recessionary conditions within India and abroad and given the fact that the domestic manufacturing sector is already facing a lot of operational difficulties,'' Mr Goenka said.
A senior official of the Federation of Indian Chamber of Commerce and Industry (FICCI) said that the chamber had specifically urged the Finance Minister to refrain from bringing down the tariff walls in a hurry.
``In view of the nature of the domestic economy, we have suggested that the tariff levels should not be lowered for another year. The Government's commitment of reaching the East Asian levels can still be fulfilled as there is some time to go for the three year period to be exhausted,'' a FICCI official said.
Speaking to Business Line, the President of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Mr K.K. Nohria, said that the chamber had asked the Finance Minister to be ``realistic'' but not ``idealistic'' in his approach towards bringing down the customs tariff to the East Asian levels.
A senior FICCI official added that the chamber had asked the Government to undertake an indepth study of the rates prevailing in the South East Asian economies before embarking on the exercise of bringing down the tariff walls on the Indian economy. ``The tariff peaks that are being maintained by these South East Asian economies on some of the sectors to protect their industry should be studied for us before we bring down our tariff rates,'' a senior FICCI official said.
CII also made a case for reintroduction of investment allowance for five years at the old rate of 25 per cent. The Assocham said that integrated township development may be given infrastructure status to boost investments in this sector. The taxation values of perks may be relooked, simplified and moderated.
The FICCI President, Mr R.S. Lodha, cited the US economic package which depends heavily on tax cuts for pulling out the economy from recession.
He suggested that India could aggressively go for tax cuts in the forthcoming Budget and such a step would be a big confidence building measure for the domestic economy.
Mr Lodha also made a case for making corporate restructuring easier.
Among those who attended the meeting were Mr Mukesh D. Ambani, Vice-Chairman, Reliance Industries, Mr Ratan Tata, Chairman, Telco, Mr M.S. Banga, Chairman, Hindustan Lever, Mr Rahul Bajaj, Chairman, Bajaj Auto, and Mr Suresh Neotia, Chairman, Gujarat Ambuja Cements, Mr Ajay Piramal, Chairman and Managing Director, Piramal Enterprises, and Mr Ashwin Dani, Chairman, Asian Paints.
Send this article to Friends by E-Mail
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line