Govt initiates moves to achieve 8% growth

MUMBAI: The government has initiated several measures including setting up of Urban Reform Incentive Fund and Power Sector Development and Reform Fund to enable it to achieve a growth rate of eight per cent.
"The urban reform incentive fund with a corpus of Rs 500 crore has been signed by 11 states. The fund seeks repealing of urban land ceiling Act and modernisation of stamp duty structure among other things," member, Planning Commission, NK Singh said delivering the valedictory address at CII''s Manufacturing Summit here on Thursday.
Referring to the Rs 5,000 crore fund for power sector, he said half of the amount has been kept aside as an incentive allowance. As many has 11 states have signed the agreement while seven others have envisaged interest, he added.
According to the pact, states have to create profit centres, cut down on transmission & distribution losses and conduct 100 per cent energy audit, he said.
Singh said an accelerated irrigation development project fund with a corpus of Rs 2,500 crore has also been set up.
"The success of these factors alongwith improvement in tax-gross domestic product ratio and incremental capital output ratio could help the achieve the targetted growth of eight per cent," the Planning Commission member added.
On the reform agenda of the government, he said it has been already articulated and there was a need to get pending legislations (Fiscal Responsbility Bill, Electricity Bill, Convergence Bill, Port Corporatisation and the act to get government stake down to 33 per cent in banks) passed in Parliament as early as possible.
Singh said proper implementation and allocation of funds was also critical in the reform process and these factors should be driven by performance.
On research and development, he said the government has to work together with the industry in this area. There was a need for a huge corpus to support R&D activities, he added.
Summit chairman and past president of CII Jamshyd Godrej said government intervention was needed to simplify indirect taxes on manufacturing by introducing value added tax (VAT) to replace sales, excise and other indirect taxes.
There was also a need to have a single rate of 10 per cent of import duty by 2006 and simplify labour reforms, he said adding, modification of labour laws to allow flexible hiring and retrenchment based on market requirement was another issued required to be addressed.
CII director general Tarun Das said manufacturing sector on a global scale was in trouble, including India and China.
India needs to create more centres of excellence, build markets, business, confidence and efficiencies to show better results, he said.