The Hindu : Front Page : Industry hopes to see package

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Monday, Feb 16, 2009
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Industry hopes to see package

K. Balchand

Believes budget will have features that will benefit all sections of society

— Photo: Shanker Chakravarty

External Affairs Minister Pranab Mukherjee, who is in charge of Finance, flanked by Ministers of State for Finance Pawan Kumar Bansal (right) and S.S. Palanimanikkam, gives the final touches to the interim Union budget in New Delhi on Sunday. Those standing (from left) are Omita Paul, adviser to the External Affairs Minister (FM); L.M. Vas, Additional Secretary, Budget; Arun Ramanathan, Finance Secretary; Ashok Chawla, Secretary, Department of Economic Affairs; Sushma Nath, Expenditure Secretary and Arvind Virmani, Chief Economic Adviser, Ministry of Finance.

NEW DELHI: In the wake of the current spell of economic slowdown, India Inc. is hoping that the United Progressive Alliance government will on Monday dole out a package in its budget that will benefit all sections of society and retrieve the economy from the contraction mode.

The newly-elected Federation of Indian Chambers of Commerce and Industry president, Harsh Pati Singhania, hoped that the exercise would be growth-oriented and provide funds to consumers. The need of the hour was to cut direct taxes to drive up demands. And to go with that, corporate taxes should be slashed so that companies had more money to invest.

Reviving confidence

Mr. Singhania said the stimulus packages have had some impact but it would take time to trigger a trickle-down effect. It was not so much a question of liquidity now but to get the interest rates lower through an intervention by Reserve Bank of India. Banks were not helping the cause of confidence-building by refusing to lend.

Mr. Singhania felt that availability of cheap credit might revive people’s confidence.

Calling for sector-specific, especially exports, solutions, he felt that the situation could change for the better by the third quarter of the next financial year.

The Associated Chambers of Commerce and Industry of India (Assocham) too called for further cut in direct and corporate tax rates.

It conducted a survey among its 400 member CEOs in the manufacturing, services, agricultural and allied sectors and 70 per cent of them were confident that External Affairs Minister Pranab Mukherjee, who holds the Finance Portfolio, would come to the rescue of farmers, the common man and the corporate bodies.

Assocham president Sajjan Jindal said the expectation among the members was that Mr. Mukherjee would address the concerns of the manufacturing, textiles, agriculture, steel, cement, real estate and the Information Technology sectors.

Mr. Jindal was equally concerned about exports, fearing a further fall of 30 per cent and its adverse impact on the fiscal deficit. His solution was a benign tax regime.

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