Financial Daily from THE HINDU group of publications
Tuesday, Jun 22, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jun 22, 2004 |
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Industry & Economy
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Budget Assocham for cut in interest payment liability Our Bureau
New Delhi , June 21 THE Associated Chambers of Commerce and Industry of India (Assocham) has suggested to the Finance Ministry to incorporate provisions in the forthcoming Budget proposals for drastically curtailing the present 10 per cent interest payment liability of the Government of its total revenue receipt. In a statement, Assocham President, Mr Mahendra K. Sanghi, has pointed out that the Government's interest payment liability of its total revenue receipt was to the tune of 3 per cent in 1980 which has exceeded more than 10 per cent as of now. Its increasing percentage has put an immense burden on the Government exchequer and has also caused anxiety for bringing about fiscal consolidation at the policy level. Referring to the recently released Annual Report of RBI, Mr Sanghi pointed out that interest cost of the State borrowings was 9.2 per cent in early 1990s which shot up to about 14 per cent by the end of 2000. The alarming trend as noticed by the Indian economy as regards to increasing interest rate payment in the last 10-12 years has suppressed the growth prospects, which needs to be reversed. Therefore, Mr Sanghi suggested that the Finance Minister should not only come out with Budget proposals, seeking to curtail the interest payment liability of the Government but also devise mechanism for reducing the future's administrative expenditure of the Government. According to him, other area of immediate concern for the Government should be to tackle the state-owned loss making PSUs whose huge losses have accumulated over a period of time and had put monumental burden on the state exchequer. Therefore, the Assocham is of the view that the State Governments should be persuaded to think for pros and cons before announcing the populist measures which is bound to impact the revenue receipts of the State Governments.
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