Associated Chambers of Commerce and Industry of India (Assocham) President Swati Piramal on Tuesday impressed upon the UPA Government to continue with the stimulus package for the economy for about two years as such measures had helped industry record double digit growth.
“The stimulus has really worked well as reflected in the double digit growth in industrial production. These measures should be continued for another 1-2 years,” Mr. Piramal told journalists here.
Ms. Piramal, the first woman President of any apex industry body, said with over 10 per cent increase in factory output in August the chamber had decided to revise its earlier GDP estimate of 7 per cent for the current fiscal. “I think the Index of Industrial Production (IIP) will continue to grow like this in the next two quarters also. We will revise upwards our economic growth estimates for 2009-10,” she added.
Ms. Piramal also said it was time for quick disinvestment of profit-making public sector enterprises (PSUs) as it would immediately help soften interest rates and assist fiscal management. “The Government should allow disinvestment in PSUs to raise Rs. 30,000 crore through this process,” she remarked.
The Government had estimated the fiscal deficit at 6.8 per cent for 2009-10. Commenting on the draft Direct Tax Code, Ms. Piramal said in theory it was good but there were 2-3 things, about which industry was worried. She said the Government should drop the proposal to introduce the Minimum Alternate Tax on assets in DTC as it was like levying wealth tax on loss making companies.
On the Goods and Services Tax, the President said it should be implemented at a flat rate of 12 per cent by April 2010. Ms. Piramal further said there was a need to reduce the key policy rates like repo and reverse repo by 50 basis points.