The Hindu Business Line : `Tax structure will be industry-friendly'

THE Union Budget for 2005-06 will usher in an industry and investor-friendly tax structure for the sugar, textile, petroleum and telecom sectors, the Union Finance Minister, Mr P. Chidambaram, said here on Monday.

Addressing the 77th annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Chidambaram said that the common thread between the four sectors at present is a "convoluted" tax structure. "We have to unravel them and make them simpler, investor-friendly and industry-friendly," he added.

A Finance Ministry appointed committee, headed by Chief Economic Advisor, Mr Ashok Lahiri, is already considering measures for streamlining the duty structure of petroleum products. The committee is expected to submit its report shortly.

On textiles, Mr Chidambaram highlighted that the United Progressive Alliance Government had announced a simpler tax regime for natural fibres in the Budget for 2004-05.

In the ensuing Budget, the Government intends to simplify the tax structure for man-made fibres.

Stating that only investment-led growth strategy can bring about sustainable growth, Mr Chidambaram underscored the need for converting the savers within the country into investors for achieving growth rates of over 10 per cent on a sustained basis.

"While foreign direct investment will come in the margin, bulk of the investments has to come from domestic investors," he said.

The Finance Minister also held that after 2000-01 and 2001-02, the current year is the first year where there has been remarkable increase in investment intention, proposals and implementation. "For the period ended October 2004, investment intention, proposals and under implementation have surged by 26.9 per cent to Rs 17,93,979 crore as against Rs 14,13,698 crore in October 2003. All this augurs well for industry. India Inc has rediscovered its competitiveness and recaptured entrepreneurial spirit. Year 2005 will be better than 2004," he said.

Mr Chidambaram urged industry to "look upon the recently constituted investment commission as a body to intermediate to the Government on your behalf."

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