GoM to propose new industrial policy measures

NEW DELHI, NOV. 15. The Group of Ministers, headed by the Finance Minister, Mr. Yashwant Sinha, will be meeting soon to take corrective action and initiate new policy measures to bring about an upturn in the industrial sector. This was disclosed here today by the Industry Secretary, Mr. P. G. Mankad.

Addressing the Managing Committee of the Associated Chambers of Commerce and Industry of India, he said the Group would also be reviewing sectoral foreign investment caps so that suggested policy measures were promptly implemented.

Mr. Mankad shared the concern of ASSOCHAM members over the high incidence of taxation on manufacturing industry and endorsed the need to bring in services sector in the tax net. He said the draft report of the expert committee, to suggest new areas among the services sector, was ready and would soon be submitted for action to the Finance Minister.

Responding to the concern expressed by members over the influx of Chinese goods in the Indian market, Mr. Mankad said while the Government was initiating measures to prevent illegal entry, the industry should immediately carry out a detailed study to facilitate Government action. Anti-dumping mechanism could not be imposed across the board unless proper homework was done.

The ASSOCHAM president, Mr. Shekhar Bajaj, said Indian industry bore a disproportionate share of the tax burden despite years of fiscal reforms. The industrial sector that accounted for 27 per cent of the GDP contributed to 80 per cent of the taxes.

In contrast, the agriculture and services sectors, which accounted for around a quarter and a half of the total GDP, contributed only 5 per cent and 15 per cent of the total taxes. The next budget should ensure that a much larger part of the tax burden on industry was shifted to the more buoyant services sector.