Finance Minister Pranab Mukherjee today sought higher investments from companies in return for boosting their business margins through budget proposals like sparing any hike in excise duty rates.
He also sought help from Corporate India in pushing further the government’s economic growth and reforms agenda and said this support was necessary for him to meet their expectations.
“Just as I have to meet up to your expectations to get you to scale new heights of productivity and growth, you also have to meet my hopes, in the process strengthening my hands,” he said in opening remarks at post-budget conference organised by industry chamber Assocham here today.
“Reforms are not a one shot exercise; they have to be pursued continuously in keeping with the changing contexts and the growing aspirations of the people. I can do more, when I have the space to do more. You have to do your bit to create that space for me,” he added.
Speaking about this year’s budget proposals, Mr. Mukherjee said that he had “the option to roll back the central excise duty to levels prevailing in November 2008. I have chosen not to do so and retain the rates at 10 per cent for two reasons.”
“I would like to see improved business margins translated into higher investment rates. I would also like to stay my course towards GST,” he added.
Mr. Mukherjee said that he wanted to address some “topical and emerging concerns” through his budget proposals.
“It is only then that I could hope to bring a convergence in the expectations of our investors, entrepreneurs and consumers on the macroeconomic prospects of the economy, and elicit the required response from them,” he said.
He listed out five principal objectives for this year’s budget proposals, the first being stronger fiscal consolidation to enlarge the resource space for private enterprise.
“Secondly, improving the supply response of agriculture to the expanding domestic demand. Together with fiscal consolidation, it would help in addressing inflationary pressures in the medium term.
The third objective, he said, was to take forward the process of reforms including in the financial sector, and the fourth was a continued thrust on an inclusive development process.
Mr. Mukherjee said that the final objective was to undertake reforms for simplifying and placing the administrative procedures concerning taxation, trade and tariffs and subsidies on electronic interface, free of discretion and bureaucratic delays.
“This would also prepare the ground for the implementation of the DTC and hopefully the GST as well, from April 2012,” he said.
According to Mr. Mukherjee, the economy is back to its pre-crisis growth trajectory, tax revenues have grown well and there is strong rebound in exports.
He also said that the government’s market borrowings have been kept lower to give the necessary space for growth in private investments.
For agriculture, he said, that new initiatives have been announced to help in strengthening the supply channel to fulfil the growing consumer demand.
“I have also increased the credit availability to agriculture and rewarded the farmers who are able to repay their loans in a timely manner by an effective interest rate of 4 per cent,” he said.
For infrastructure, Mr. Mukherjee said that he wanted to “attract and leverage private investment in infrastructure to meet the growing requirement of the economy.
He also listed out certain concessions on direct and indirect taxes, which were announced during his reply to the discussion on the Finance Bill in Parliament.