FM meets Industry on Budget

New Delhi, Jan 9 (UNI) Finance Minister P Chidambaram today took the opportunity of his pre-Budget meeting with Industry to discect its concerns sector-wise and highligted how his focus would be to impart a new impetus to growth and investment by eliminating the obstacles which still remain.

The Finance Minister spoke of the sound state the economy was in and exuded confidence that a 9 per cent growth this fiscal was almost certain. He stressed the need for sustaining a double digit growth for the manufacturing sector and underlined the need for at least a four per cent growth to ensure sustained growth with equity.

Mr Chidambaram met representatives of industry, industry associations and chambers of commerce at his North Block Office as part of his pre-budget consultations with various interest groups and experts.

Some important suggestions made by the participants during the meeting are as follows: General: Provide incentives for Research and Development (R&D) activities for all sectors; Set up a Skill Development Bank and facilitate intermediation of knowledge; Encourage investment in the infrastructure sector by enhancing tax exemptions for such investment; Move towards an effective GST rate of 15 per cent in the next few years; Promote India as a Corporate Headquarter by giving tax incentives; Give infrastructure status to gas pipelines and associated storage facilities and mega steel projects; Give exemptions for investment in agriculture related sectors like cold-chains etc; Increase depreciation rate to 25 per cent per year for tax purposes; Remove Fringe Benefit Tax (FBT) on expenditure incurred on sales promotion; Remove anomalies in the Cutsoms and Excise duty structures; Provide incentives for Indian companies to become global.

Industry Specific: Small Scale Enterprises (SSI): Increase limit for excise exemption to three crore rupees and rationalise excise duty rates to provide a phasing in of the increase in the rates; Remove anomalies in the excise duty structure; Remove FBT on small and medium enterprises; Ease depreciation norms; Increase tax audit exemption limit; Drugs and Pharmaceuticals: Enhance abatement norms from the existing level to 45 per cent of MRP; Remove withholding taxes on R&D and include expenses on clinical trials in R&D; Include overseas expenditure on R&D for exemption purposes; Set up training institutes for biotechnology.

Textile: Extend the Textile Upgradation Fund (TUF) by another five years; Provide capital subsidy for processing hubs; Provide support system for relocation of old existing units.

Telecommunications: Decrease the total tax burden on this sector by rationalising multiple duties and charges; Do away with the requirement of financial and performance guarantees; Simplify and rationalise customs duty on software for telecom industry; Information Technology: Facilitate setting up of seed funds and angel funds to address lack of innovation; Provide incentives for setting up rural electronic infrastructure facilities; Remove complications in IT related tax structure and bring down litigations.

Tourism: Provide 'infrastructure' status to tourism industry; Earmark funds collected for maintenance of heritage structures; Increase budgetary allocation for promotion of India as a tourist destination.

Apart from the eminent industrialists and industry organsiations, the meeting was also attended by the two Ministers of State for Finance Pawan Bansal and S S Palanimanickam.

UNI