India Inc makes strong pitch for continuance of stimulus package
Hindu Business Line, January 6, 2010, Page 18
Economic recovery still ‘fragile'; time not ripe for monetary tightening.
Our Bureau, New Delhi
Corporate India has made a fervent plea to the Union Finance Minister, Mr Pranab Mukherjee, to continue with the existing fiscal stimulus at least till September as the economic recovery was still ‘fragile' and that a low base effect was exaggerating growth in some sectors.
The unanimous and collective pressure from captains of industry could tilt the scale in favour of retention of the fiscal stimulus beyond April even as policymakers had earlier dropped strong hints that the exit could begin in the upcoming Budget through reversal of indirect tax cuts.
“We have all together requested the Finance Minister to continue with the fiscal stimulus package as the economic recovery is still fragile,” Ms Swati Piramal, Assocham President, told reporters at North Block after pre-Budget meeting of industrialists with Mr Mukherjee and senior Finance Ministry officials.
At the meeting, India Inc also stressed that time was not ripe for monetary tightening and submitted that food inflation was more on account of supply side constraints.
On the fiscal stimulus issue, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, said that the Government could consider withdrawal at the time of introduction of the proposed goods and services tax (GST).
“We are still seeing low base effect exaggerate growth. Of course, there is real growth. But we would like the finance minister to wait and see how it goes and withdraw the fiscal stimulus in calibrated manner. We want GST to be introduced as early as possible,” Mr Srinivasan said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) President, Mr Harsh Pati Singhania, said that investments are yet to pick up although there are signs of economic recovery.
“Our suggestion was stimulus should be continued at least for the first two quarters of the next fiscal,” Mr Singhania said.
FICCI has also urged the Finance Minister to maintain the peak customs duty at the current level of 10 per cent.
Asked about export sector, Mr Singhania told Business Line that the chamber has made a case for reintroduction of tax exemption on export profits (Sec 80HHC benefits).
Besides raising issues such as the cascading effect of dividend distribution tax, India Inc has also urged the Finance Minister not to go ahead with the proposed levy of minimum alternate tax (MAT) on gross asset basis under the new Direct Taxes Code.
Industrialists who attended the meeting include Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra; Mr Ashwin Dani, Vice-Chairman and Managing Director, Asian Paints Ltd; Mr Gautam Singhania, Chairman and Managing Director of Raymond; Mr Venugopal Dhoot, Chairman, Videocon Group, and Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy.
Hindu Business Line, January 6, 2010, Page 18
Economic recovery still ‘fragile'; time not ripe for monetary tightening.
Our Bureau, New Delhi
Corporate India has made a fervent plea to the Union Finance Minister, Mr Pranab Mukherjee, to continue with the existing fiscal stimulus at least till September as the economic recovery was still ‘fragile' and that a low base effect was exaggerating growth in some sectors.
The unanimous and collective pressure from captains of industry could tilt the scale in favour of retention of the fiscal stimulus beyond April even as policymakers had earlier dropped strong hints that the exit could begin in the upcoming Budget through reversal of indirect tax cuts.
“We have all together requested the Finance Minister to continue with the fiscal stimulus package as the economic recovery is still fragile,” Ms Swati Piramal, Assocham President, told reporters at North Block after pre-Budget meeting of industrialists with Mr Mukherjee and senior Finance Ministry officials.
At the meeting, India Inc also stressed that time was not ripe for monetary tightening and submitted that food inflation was more on account of supply side constraints.
On the fiscal stimulus issue, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, said that the Government could consider withdrawal at the time of introduction of the proposed goods and services tax (GST).
“We are still seeing low base effect exaggerate growth. Of course, there is real growth. But we would like the finance minister to wait and see how it goes and withdraw the fiscal stimulus in calibrated manner. We want GST to be introduced as early as possible,” Mr Srinivasan said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) President, Mr Harsh Pati Singhania, said that investments are yet to pick up although there are signs of economic recovery.
“Our suggestion was stimulus should be continued at least for the first two quarters of the next fiscal,” Mr Singhania said.
FICCI has also urged the Finance Minister to maintain the peak customs duty at the current level of 10 per cent.
Asked about export sector, Mr Singhania told Business Line that the chamber has made a case for reintroduction of tax exemption on export profits (Sec 80HHC benefits).
Besides raising issues such as the cascading effect of dividend distribution tax, India Inc has also urged the Finance Minister not to go ahead with the proposed levy of minimum alternate tax (MAT) on gross asset basis under the new Direct Taxes Code.
Industrialists who attended the meeting include Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra; Mr Ashwin Dani, Vice-Chairman and Managing Director, Asian Paints Ltd; Mr Gautam Singhania, Chairman and Managing Director of Raymond; Mr Venugopal Dhoot, Chairman, Videocon Group, and Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy.
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