The Hindu Business Line : India Inc calls for ‘new deal’ Budget

New Delhi, June 1 India Inc has called for a “new deal” Budget that would give a big push to infrastructure besides making bold statements on the disinvestment front.

It expects the Finance Minister, Mr Pranab Mukherjee, to use the opportunity of the upcoming Budget to make big picture statements as opposed to merely tinkering with taxes.

“I have stressed the need for a large new deal that would transform the economy. We should push highways development and help complete the left over work in the North-East-West-South corridor. The entire world will watch the Budget announcement and we need some bold statements on disinvestment,” Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra, told Business Line after a pre-Budget meeting the Finance Minister had with industrialists here today.

Project monitoring cell

The Larsen & Toubro Chairman and Managing Director, Mr A. M. Naik, told reporters that he had suggested a “big infrastructure push” in the Budget. He also submitted to the Finance Minister a list of infrastructure projects that needed a push.

“I have also suggested that we need a monitoring cell to ensure proper implementation of projects. This cell should have an industry representative. The real issue for us is implementation. There is also a need to ensure availability of long-term funds at interest rates of 7-8 per cent,” Mr Naik said.

Besides restoring tax exemption on export profits, Mr Naik is also understood to have made a case for tax exemption on income earned by domestic companies from foreign investments made by them. He said that dividends earned from foreign companies should not attract tax here. Also, multilevel dividend taxation should be done away with.

Cut corporate tax rate

On the tax front, industry associations — FICCI and CII — suggested re-introduction of investment allowance besides an increase in depreciation rates of plant and machinery from 15-25 per cent.

Both the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham) sought reduction in the corporate tax rate.

The FICCI President, Mr Harsh Pati Singhania, said the reduction in excise duty, service tax and rationalisation of Customs announced in stimulus packages should be continued for one more year. He told Business Line that FICCI has made a case for a big push to disinvestments so as to give a boost to the capital market.

Recognising the stress on fiscal situation, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, said the apex chamber had not sought any reduction in key excise and direct tax rates. The CII emphasised promotion of investments by sending a clear message to investors that India’s tax policies are consistent and have continuity. It also called for the setting up of an infrastructure monitoring and implementation agency.

The Assocham Senior Vice-President, Dr Swati Piramal, told reporters that she had made a case for lowering of interest rates by 2-3 per cent with immediate effect.

Mr Sunil Bharti Mittal, Chairman and Managing Director of Bharti Group, said interest rates need to go down to boost domestic consumption. Foreign direct investment has been the cornerstone for growth in the country and the Government should be supporting it.

Among the top industrialists who attended today’s meeting were Mr Venugopal Dhoot of the Videocon Group; Mr K. Ravi Kumar, CMD of Bharat Heavy Electricals Ltd; Mr Gautam Singhania, Chairman and Managing Director of Raymond Ltd; and Mr Tulsi Tanti, Chairman and Managing Director of Suzlon Energy.

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