Industry Leaders Met FM in
Pre Budget Meets
The Union Finance Minister Pranab Mukherjee has said in order to achieve the objective
of inclusive growth, we need to have 9 plus growth
rate for a sustainable period. The Finance Minister said that in order to ensure
that everybody gets due share of development, it is necessary that the benefits
of the various development programmes reach the targeted beneficiaries in the
given timeframe. The Finance Minister was addressing the representatives of
Indian business and trade on 3 February in a meeting called by him as part of
the Pre-Budget consultation process. The Finance Minister Mr.
Mukherjee said that there are various challenges before us including higher
growth, keeping inflation and fiscal and revenue deficit to manageable level
among others which we all have to address collectively. The Finance Minister
gave a brief account of micro and macro economic
situation to the business and corporate leaders before soliciting their
suggestions on vital economic issues. About 20 representatives of industry and
trade sector attended the meeting. Those who attended the today’s meeting
included B. Muthuraman from CII, R.V. Kanoria from FICCI, R.N. Doot, Assocham, Y.C. Deveshwar, ITC
Ltd., Nitin Paranjpe,
Hindustan Unilever Ltd., Tulsi R. Tanti, Suzlon Energy Ltd., B.P. Rao,
BHEL, Dr. Naresh Trehan, Mdeanta, M. Rafeeq Ahmed, FIEO, Som Mittal, Nasscom, Suman Jyoti Khaitan, PHD Chamber of
Commerce & Industry, Joginder Kumar, Federation
of Tiny & Small Industries of India and R.K. Sonthalia,
Export Promotion Council for EOUs & SEZ among others.
The representatives of
business and trade sector gave various suggestions for consideration of the
Finance Minister. Some business leaders suggested that there is a need for
amendment of Fiscal Responsibility and Budget Management (FRBM) Act with a
roadmap for reduction in fiscal deficit in the next five years which would help
in infusing a sense of discipline in raising revenues and containing
expenditure. Most of the business leaders were in favour of reduction in
interest rate at least by 50 basis points to send the positive signal to the
market, industry and the corporate world at large as well as to boost the investment
sentiments. It was also suggested that service tax base may be widened with a
negative list and to exempt infrastructure sector companies and SEZ units from
MAT. It was suggested to shift to accrual based budgeting from cash based
budgeting for better outcome of money spent. It was suggested to revisit
concept of dividend distribution tax. Disinvestment should come back on the
agenda of the Government alongwith a roadmap. In
order to improve health care, it was suggested that a benefit of tax deduction
of Rs.10,000 be given to the citizens for preventive
health check-up. It is better to invest in health care than curing the disease
In order to boost the renewable sector, it was suggested that accelerated
depreciation be continued for another decade for SMEs in this sector. It was
also suggested that to achieve 8-9 GDP growth, agriculture sector should also
grow at 4-5% to feed more than 1.2 billion people of India. In order to achieve
this, modern farming techniques, Model Land Leasing Act, legalising land
leasing in all States, encouraging R&D, setting-up
of National Mission on Farm Mechanisation in PPP mode among others were
suggested. It was also suggested that fruits, vegetables, milk and other
perishables should be de-notified from APMC list. In order to improve the tax
administration system and better generation of revenue, it was suggested to
make tax evasion difficult and bring more items under tax net, move to
e-invoicing system, implement DTC in its entirety and clear funds held-up in
tax litigation and disputes among others. In order to boost the exports, it was
suggested that interest rate for MSME sector be kept at 7 per cent and for
others at 9 per cent or subvention should be provided to all sectors of exports
at least till 31st March, 2013. Exports to be included in priority sector
lending by the banks. It was also suggested that tiny and small sector units be
treated at par with agriculture sector and no service tax be charged from them.
It was also demanded that duty on readymade garments be also reduced or
withdrawn. Similarly, agro-based units be exempted
from excise duty while off-set printers be exempted from service tax.
[Source: Ministry of
Finance, PIB Press Release dated 3rd February 2012]