Happy at industry growth, PC roots for farm sector
Betting on the ‘auto-pilot’ India Inc story, finance minister (FM) P Chidambaram reposed his faith in industry to continue clocking higher growth figures and contribute to buoyancy in tax collections.
By TNN |
Betting on the ‘auto-pilot’ India Inc story, finance minister (FM) P Chidambaram on Thursday reposed his faith in industry to continue clocking higher growth figures and contribute to buoyancy in tax collections. With an investment-to-GDP ratio at 33%, the FM was confident that India Inc will contribute to world output projected to grow at 4%. The minister also urged the industry to hold the price line to help the government contain rising inflation.
“I am relying on your growth, your performance, your innovation , inventiveness, your ability to reach new markets,” Mr Chidambaram said at a post-Budget interaction with the industry. Defending his pro-agriculture sector moves in Budget 2007-08 , he said that Indian industry is ‘mature today’ and doesn’t need government attention, stressing the fact that it is the agricultural sector that requires government intervention.
“Just imagine what can happen to industry and services if agriculture grows at 4%. It is in your interest that agriculture must grow at 4%,” the FM said. By addressing areas of production , productivity, seeds, power and fertiliser, the government is trying to increase its intervention in administering agriculture, he said. The industry pitched in a demand to review the multiplicity of taxation resulting in embedded taxation which increased the effective tax rate and blunted competitiveness.
It was said that the MAT extension on money market instruments , disincentivised debt investment. It was argued that in order to incentivise slackening bank deposit growth in the face of a higher credit offtake, the solution was not to discourage investment in debt. The FM said that he has been repeatedly reassured that the growth in the Indian economy was not on account of a “cyclical upturn” but a result of a “structural shift” in the economy induced by industry and services.
Excise hike for not sticking to price line
“The cement prices in different parts of India vary significantly to the extent that cement is a virtual regional market. Because of such a huge demand for the product, I had cautioned the industry at a recent FICCI meet, to abstain from pushing up prices. While most industries have stuck to ‘holding the price line’ , cement prices have gone beyond all reasonable limits. Therefore, we say, we will try to reward those having inclination to hold the price line, but we will tax anyone using that opportunity (of huge demand) for making huge profit, ” said FM P Chidambaram . The Budget has proposed to decrease excise duty by Rs 50 per tonne for cement priced up to Rs 190 per bag and increase it to Rs 600 per tonne from Rs 400 for those above that level, reports Our Bureau from New Delhi.
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