ASSOCHAM for continuance of fiscal stimulus

Hyderabad, Nov 5 : While pressing for continuance of fiscal stimulus package for one or two more years, Associated Chambers of Commerce and Industry of India(Assocham) President Swati Piramal today expressed concern over several provisions in the Direct Tax Code draft.

Talking to newspersons here, Ms Piramal said ''ten per cent growth in August is very good. But this(double digit growth) is fragile. The Centre should continue the fiscal stimulus package till the recovery of western economies. Interest rate should be stabilised at six per cent to facilitate setting up of new Industries.'' Referring to Direct Tax Code draft, she said, asset-based taxation was only in vogue in countries like Argentina and Nicaragua faced with hyper-inflation of over 400 per cent requiring an alternative method of taxation.

The Assocham Chief said the Minimum Alternative Tax(MAT), as proposed in the new tax code, was more of wealth tax to be paid by even loss-making companies, companies yet to start business and even on assets yet to be put to use.

''This will have a significant impact on cash flow, thereby hurting fiscal growth, especially for capital-intensive and infrastructure companies with long-gestation periods,'' she added.

The Centre is contemplating introduction of the new tax code from April one, 2011.

--UNI

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