Chambers oppose Kelkar plan to cut exemptions

NEW DELHI: The PHDCCI (Punjab Haryana Delhi Chamber for Commerce and Industry) has asked the government to do away with various exemptions recommended by the Kelkar Committee with prospective effect. Due to this, units established before the stipulated time will continue to get the incentives as promised.
On personal taxes, the Chamber has recommended the finance ministry to set aside 5% of the collections in a fund to be later reimbursed to the regular tax payers as pension benefits.
The Chamber presented its recommendations for ’03-04 Union Budget in a meeting with Arun Shourie, the minister for disinvestment and commerce, and finance ministry officials. Since finance minister Jaswant Singh is not meeting the chambers and industry leaders separately this time, Mr Shourie met all the four Delhi-based Chambers, CII, FICCI, Assocham and PHDCCI simultaneously yesterday.
PHDCCI president, PK Jain, impressed upon the government to give priority status to the agriculture and food-processing sector. He also asked for special tax incentives for the new investments in the sector.
According to PHDCCI, only agriculture and food processing has the potential to broad base employment and income growth in the country. He also demanded policy initiative aimed at making India a major sourcing base for processed foods in the world.
On the depreciation front, the Chamber has opposed the Committee recommendation about reducing the general rate of depreciation from 25% to 15%.
According to PHDCCI, this will initially generate more tax revenues but will hit the corporate bottomlines particularly in sectors where technological obsolescence is high.
As for the Securitisation Bill, PHDCCI has recommended that in case of productive assets of the units being taken over by the lenders, the operations of such units should continue. This will yield better price on sale of units.
The Chamber suggested the finance ministry form a small advisory body representing industry and financial institutions to look into the matter of unpaid loans.