Financial Daily from THE HINDU group of publications
Wednesday, Mar 12, 2003
Industry & Economy
TN should strive for 8 pc growth rate: CII
CHENNAI, March 11
THE Confederation of Indian Industry has, in its pre-Budget memorandum, asked the Tamil Nadu Government to target an eight per cent growth rate for the State Domestic Product and an industrial growth rate of 10 per cent. It has identified six areas that it believes will help the State in achieving this level of growth.
According to a CII press release, the first engine of growth is the IT industry and biotech, which, the CII says, is the State's unique selling proposition. It has asked the State to leverage its USP of an "intellectual powerhouse" to convince IT multi-nationals to set up research centres here. The State should aim for a 20 per cent market share in IT enabled services.
The CII has asked the Government to allocate funds for developing knowledge industry township.
Creating world class facilities will further hasten this process. Substantial progress needs to be made on developing the IT corridor (Old Mahabalipuram Road).
According to the CII, the infrastructure sector is another vital engine of growth for the State. The major challenge to the State is the cost of power to industrial users, which works out to Rs 4.20 per unit. This is much higher than the national and international levels, the CII has pointed out and wants the utility to bring down the tariffs to half that level. The CII also wants the Government to privatise and restructure the power sector based on the revenue streams in a phased manner.
The release said that the CII also wanted the Government to prepare a State highway development policy. It recommended a plan for connecting the major cities with expressways to be prepared immediately and showcased for private participation. Highway improvements on user pays basis by levying tolls should be taken up. In addition, mega industrial projects should include a provision of one per cent of the project cost for highways.
The third growth engine, the CII said, was the agricultural sector. The CII wanted the State to focus on a growth of 5-6 per cent in the next five year Plan. It recommended that the State encourage corporate farming by envisaging private participation and by efficient input use.
The co-operatives should be encouraged to create conditions for the entry of corporates and these corporations would need control, involving new property rights and contract enforcement mechanisms that would change the agrarian relations. The CII suggested that the State simplify the process of maintaining cold storage and warehousing.
The CII wanted the Government to prioritise the development of the southern districts to ensure a holistic development of the State.
The fifth growth engine was the tourism sector, for which the heritage sites needed to be developed and harnessed for their tourism potential.
The average tax burden on a tourist worked out to 30-40 per cent as against 4-6 per cent in Hong Kong and Singapore, the CII said and wanted the State to consider rationalising tourism related taxes. The State should promote private sector participation in the operation and maintenance of heritage sites.
On tax related issues, the CII wanted the CST to be reduced to one per cent and additional sales tax to be completely abolished. The CII also wanted changes to be made to entry tax and wanted online filing of VAT returns, and direct remittance to nominated banks.
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