Financial Daily from THE HINDU group of publications
Wednesday, Jan 12, 2005
Industry & Economy
India Inc pitches for core sector investment
Dr Rakesh Mohan, Secretary, Department of Economic Affairs, and Mr D. Swarup, Expenditure Secretary, on their way to attend a pre-Budget meeting with agriculturists in the Capital on Tuesday. Kamal Narang
New Delhi , Jan. 11
CORPORATE India has made a case for an investment-oriented budget that would give further fillip to infrastructural development, especially in the agricultural and food-processing sectors, besides giving an impetus to growth and boosting employment in the economy.
At their pre-budget meeting with the Finance Minister, Mr P. Chidambaram, industry captains urged the government to look at widening the tax base by bringing "rich and influential" farmers under the tax net.
The President of the Federation of Indian Chambers of Commerce and Industry, Mr Onkar S. Kanwar, told Business Line that he had sought an investment-oriented budget with emphasis on employment creation and widening of the tax base.
He said there is a need to have at least 15 crore assesses in the country's tax base as against the existing 3.5 crore. The tax base, he said, could be widened by bringing agricultural income from commercial crops beyond Rs 5 lakh within the purview of the tax net.
The FICCI President is understood to have made a case for lowering the corporate tax rate from 36.6 per cent to 30 per cent for domestic companies. Mr Kanwar also stressed the need for additional depreciation for creating cold-chain infrastructure.
On his part, the President of the Associated Chambers of Commerce and Industry of India, Mr Mahendra K. Sanghi, underscored the need for a negative list for the services sector (for service tax) and sought to widen the tax base by bringing in "rich and influential farmers" under the tax net.
The Society of Indian Automobile Manufacturers President, Mr Jagdish Khattar, said he had sought scrapping of the 8 per cent special excise duty (SED) on automobiles. "We do not want a 4 per cent cut from the existing 8 per cent SED. We feel that a 4 per cent SED cut will get lost and there would not be any tangible benefit to any stakeholder. Therefore, we have asked for doing away with the 8 per cent SED," Mr Khattar, who is also the Managing Director of Maruti Udyog Ltd, told newspersons here.
Automobiles currently attract an excise duty of 24 per cent, which includes a SED of 8 per cent.
Besides seeking extension of the duration of R&D benefits that are already available with the automobile industry, Mr Khattar also underscored the need to bring down customs duty on raw materials used by vehicle manufacturers.
The Chairman of the Videocon Group, Mr Venugopal N. Dhoot, said the government needs to speed up special economic zones to attract foreign investments and boost exports. He said he had also sought abolition of minimum alternate tax and the 2 per cent education cess. He also suggested that the FDI cap in telecom and insurance sectors be raised.
The Bharti Televenture CMD, Mr Sunil Mittal, said he had sought a "zero-duty regime" for telecom equipment imports.
According to the Confederation of Indian Industry President, Mr Sunil Kant Munjal, the government needs to focus on sectors such as business process outsourcing, textiles, auto components and companies that could emerge as global leaders.
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