Industry and commerce bodies on Tuesday urged Finance Minister Pranab Mukherjee to continue with the stimulus package in his budget for 2010-11 to sustain the growth impulses in the economy.
Federation of Indian Chambers of Commerce and Industry (FICCI) President Harsh Pati Singhania in his memorandum to the Finance Minister has also voiced against tightening of monetary policy as failure to contain food price inflation would derail the growth process and adversely impact the industrial sector.
Mr. Singhania sought to claim that real investment activity was still to happen at the desired level and argued that a sustainable recovery would itself help the government meet its FRBM (Fiscal Responsibility and Budget Management) targets.
Stressing that economic slowdown had reduced corporate investment activity, the FICCI called for the reintroduction of investment allowance to enable companies to retain more investible funds for modernisation and expansion.
Associated Chambers of Commerce and Industry of India (Assocham) President Swati Piramal, in her memorandum, urged the Finance Minister to immediately integrate excise and service tax into central GST from April 2010. Ms. Piramal said that a flawless GST would reduce cost of production of industry by 10-15 per cent and yield additional revenue of over Rs. 1 lakh crore to the government.
She also demanded a reduction in corporate tax saying that the effective high rate of 35 per cent even discouraged foreign investments.
As regards personal income tax, Assocham wanted that the ceiling be enhanced to Rs. 5 lakh and FICCI wanted that the 30 percent tax liability should be levied on annual income of Rs. 7 lakh and above raising it from the current Rs. 5 lakh.
These bodies hoped that the Finance Minister would, in his budget, unveil a stratagem that would trigger investment for growth and stimulate demand through fiscal measures.
