Union Budget Needs to Focus on reviving growth: Adi Godrej
Given the current economic situation, the objective of this year's Union Budget should be the revival growth, feels noted industrialist and President of Confederation of India Industry (CII) Adi Godrej.
Commenting on the overall economic scenario after participating at Union Finance Minister P Chidambaram's consultative committee meeting on Pre-budget recommendations in New Delhi, Mr Godrej said under the present situation it would have been natural to seek a stimulus, including reductions in excise and service tax rates.
However, in the context of the poor fiscal condition, CII had suggested that the present rates of excise and service tax rates be maintained as any hike at this point would be an unreasonable request, CII sources here quoting Mr Godrej said.
CII had also suggested that the peak customs duty be maintained at ten per cent because of huge excess capacity globally, which could pose a threat through cheap imports into India in case of a reduction in customs duties, Mr Godrej stated to have said.
He said looking at the external conditions, CII also put forward before the union Finance Minister its suggestion to consider allowing the two per cent interest rate subvention for all sectors of exports, as compared to the current policy of allowing this only for select segments of industry.
Referring to the investment demand which had considerably dried up, Mr Godrej suggested that the government shoul allows 25 per cent accelerated depreciation for investments in plant and machinery for a pre-defined period of three to five years. This should help prepone investments without affecting revenues.
Similarly, he said, a 250 per cent weighted tax deduction on expenditure incurred by companies on "going green' could be considered since this would induce investments.
CII had also strongly recommended the acceptance of recommendations of the Kelkar Committee by the Government and be implemented.
Further, fiscal consolidation could also be achieved by way of disinvestment to the tune of Rs 50,000 crores, resolving a part of the Rs 4,00,000 crore stuck in taxation disputes and rationalising subsidies, the CII sources here informed.
CII has also recommended gradual move towards removal of diesel subsidy over the next three years, besides cutting fertilizer.