Trade bodies draw up list of demands
01 Jun 2009
With a fresh government in place and the annual budget around the corner, trade and industry bodies have drawn up their usual wishlist. This year however, the normally routine exercise assumes special significance in view of the economic downturn.
On Friday, the Confederation of Indian Industries and the Federation of Indian Chambers of Commerce and Industry unveiled separate 100-day action plans for the government.
''Clearly, the government needs to take definite action on six major fronts, namely, embark on an investment-led growth strategy through higher public and private sector investments; stimulate demand through fiscal measures to bring consumers back into the market; launch a second green revolution; announce major initiatives on skill development and human resource enrichment; significantly enhance national security and drastically improve governance,'' FICCI president Harshpati Singhania said in a statement.
CII President Venu Srinivasan had similar priorities, though phrased differently. He said interest rates in India were high compared to many other economies, and key policy rates should be cut by at least 0.5 percentage points. CII's key recommendations include monetisation of fiscal deficit and reducing interest rates to counter large government borrowings, which it feels are negating the efforts of the Reserve Bank to get the economy moving.
CII also called for increased spending on infrastructure as well as proper implementation of projects. ''Infrastructure investments are not only urgently needed in the immediate term for growth impetus - as more than 200 industry sectors benefit for demand creation - but it is also essential for improving competitiveness of Indian manufacturing,'' Srinivasan said.
The industry chamber also called for hastening of reforms in the banking and insurance sector. ''The move to allow 26 per cent foreign investment in pension and fund management companies awaits the approval of Parliament. The Bill is pending in Parliament since 2005,'' CII said.
Srinivasan saw no reason for the RBI to keep vital policy rates at the current levels with the inflation rate being almost at the rock bottom. He demanded that the repo and reverse repo rates be brought down by at least 50 basis points.
FICCI chief Singhania wants the role of the private sector in major government projects to be increased by bringing in greater public-private partnerships. He also wants to see fiscal measures aimed at increasing consumer demand and employment.
Harsh Mariwala, the FICCI vice-president, believes there may be some continuation of certain excise benefits that the government had given for a limited period of time. He called for the fringe benefit tax removed, and direct taxes rationalised.
Nasscom, the apex body of the software industry, had announced its priorities as soon as the new government was elected. It wants extension of tax benefits as well as the removal of inequities and multiplicity of taxes like FBT.
Nasscom Chairman Pramod Bhasin also called for an overall uniform policy environment to enhance India's competitiveness and attract foreign investment.
In 2005, the government had imposed FBT, a levy on perks provided to employees of IT companies. The industry had opposed the move, as it offers employees a lot of such benefits as part of their employment package.