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In
India Inc.’s Pre-Budget
Expectations Survey conducted under aegis of The
Associated Chambers of Commerce and Industry of India (ASSOCHAM)
with participation from its 400 members in manufacturing,
services, agriculture and allied sectors, over 70 per cent exuded
optimism saying that Mukerjee is likely to announce
packaged deal for manufacturing, agriculture, textiles,
steel, cement, real estate and ITeS to significantly
release their ongoing stress due to global slowdown.
“The
Finance Minister is also expected to announce increase in personal
tax ceiling and introduce measures to hike
subsidies, put in place series of low-cost housing schemes
and revamp public distribution system with special focus
on rural employment and education”, felt over 60 per
cent of CEOs.
Releasing
findings of ASSOCHAM Survey, its president, Sajjan
Jindal said that the major demand of India Inc. for many
years has been for reduction in corporate
tax which remains unattended to. India
Inc., therefore, anticipates that Mr. Mukherjee would
revisit corporate tax rates in India and not only remove
surcharge on it but bring it down at global average of
around 26-27% especially at times of meltdown.
According
to ASSOCHAM, corporate tax in European countries is around
23 per cent, in Latin America it is 26 per cent and
that of Asia Pacific around 28 per cent. China brought
down its corporate tax from 33 per cent in 2007 to 25
per cent in 2008, Germany from 38 per cent to 29
per cent and in Hong Kong, corporate tax its
nearly 17 per cent, in Malaysia and Philippines it is
between 26-27 per cent against over 33 per cent of
India.
Eighty per
cent of CEOs that took part in ASSOCHAM survey felt the
need for across the board reduction in excise with minimum
4 per cent cut in it and urges the government to
introduce Goods and Services Tax (GST)
by 2010 as promised
by the UPA government. In addition, this percentage of CEO
has also demanded imposition of heavy anti-dumping duties
on goods coming to India from many of its neighbour
including those of China, Sri Lanka, Malaysia, Thailand
and Philippines.
Nearly
55 per cent of CEOs have said that although inflation
has fallen significantly and its impact is being reflected
on prices of many commodities
such as metal, zinc, copper, aluminum which is a good
development since crude prices internationally have come
down heavily. This lot of CEO is optimistic that the
inflation will further moderate to help common man access
commodities in near future at much cheaper rates.
However,
the major challenge before the Finance Minister would be
to explore ways so that prices further moderate which can
happen provided supply demand mismatch is removed with
fairer transportation and other transaction costs.
A
vast majority of CEOs have felt that manufacturing and
agriculture are extremely stressed sector. The
situation in cement and steel is still alarming.
Despite demand, their consumption is not rising because of
cost factor and therefore anomalies in duty structure
needs to be urgently revisited, said Mr. Jindal, quoting
findings of ASSOCHAM Survey.
On
international trade front and reduction on fiscal deficit,
70 per cent CEOs held that India’s foreign trade
will remain under severe pressures as export targets will
be extremely difficult to be realized and nearly 30 per
cent fall in export target is anticipated for current
fiscal. Likewise, the fiscal deficit which the UPA
government had contain below 3 per cent is likely to
be close to 5 per cent and even higher for current
fiscal.
The
Chamber has, therefore, recommended that while government
will keep on earning revenues through direct and indirect taxations,
the policy makers will have to work harder to create
demand for its goods and services in markets that are not
saturated and reduce its fiscal burden by putting in place
a benign tax regime, concluded the ASSOCHAM Survey.
Source
: NDTV.com - New Delhi, India, dated 16/02/2009
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