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Budget: CII suggests slew of initiatives

By Our Special Correspondent

NEW DELHI DEC. 30. The Confederation of Indian Industry today urged the Government to cut the corporate tax rate for domestic and foreign companies to 30 per cent apart from granting exemption from Minimum Alternate Tax.

Commending a slew of initiatives in its pre-budget memorandum, the confederation's chief economist, Omkar Goswami, noted that "the thrust of this year's budget recommendations is to push for 8 per cent GDP'' and added that this meant that the manufacturing sector should achieve a growth of 11 per cent.

He also suggested abolition of 5 per cent surcharge on personal tax and elimination of the dividend tax in the hands of recipients as introduced in the previous budget on the grounds that it is unwarranted double taxation of income. Pointing out that textiles is a sector having huge growth potential and large employment opportunities, the CII has recommended 8 per cent excise duty on yarn, woven, knitted fabrics, garments and made-ups and removal of SSI reservation on the knitted fabrics sector.

The memorandum says that a part of the forex reserves should be utilised to set up a "Created in India Fund'' for marketing and branding Indian textiles abroad, Modernisation Fund for financing import of the machinery and Global Textiles and Garments Outreach Fund to help acquire textile, garmenting and allied companies abroad.

While suggesting that tourism has to be on the priority agenda of the country, it has recommended creation of a Cabinet Committee on tourism under the chairmanship of the Prime Minister. Further the outlay for tourism should be at least 3 per cent of the total budget outlay for the next five years.

On corporate restructuring through mergers, amalgamations and de-mergers, the memorandum said it should be facilitated and made easy by widening the scope of relevant provisions of law. Also greater tax incentives should be given to banks, financial institutions as well as NBFCs for provisioning for non-performing loans.

It also said that 16 per cent special excise duty should be eliminated within one year and an 8 per cent excise

duty on textiles, garments, apparel, computer hardware and GC sheets should be charged.

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