The Hindu Business Line : Montek favours cut in duty levels

(From right) The Deputy Chairman of the Planning Commission, Dr Montek Singh Ahluwalia, with FICCI President-elect, Mr Onkar S. Kanwar, and the CMD of Moser Baer India Ltd, Mr Deepak Puri, addressing the FICCI AGM in the Capital Tuesday. — Ramesh Sharma

New Delhi , Dec. 28

THE Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, today came out in favour of a general reduction in duty levels. "Our general duty levels must come down," he said at a special interactive session organised by FICCI.

Responding to a demand by an IT player for an SEZ status to IT hardware manufacturing units, he said: "The general principle is that user-specific exemptions will be difficult to give, unless you are physically located in an area."

He said that the industry's concerns on the inverted duty structure in the wake of FTAs - high rates on raw materials and inputs and lower levies on import of finished products - would be addressed over time as the average tariff level is expected to come down to those prevailing in Asean region. This would go a long way in correcting anomalies, he added.

Dr Ahluwalia also refuted reports of Government policy to expand the price control in the pharma industry. "I am aware of media reports, but I am not aware of any Government policy which talks of expansion of price control."

On issues raised by Mr A. Vellayan, Director (Marketing), Murugappa group, for the fertiliser sector, he said that the sector was subject to a "totally irrational" set of controls.

Stating that the fertiliser industry held the key to rapid agricultural growth, Dr Ahluwalia said that there were several distortions in agriculture that need to be corrected.

Besides, problems such as the water level need to be addressed. On the issue of labour reforms, he said that many State Governments were keen to provide greater flexibility in this regard in special industrial zones.

"Some States have come to us that for special industrial zones; perhaps we can give some flexible treatment on labour laws. I do not know if legally it is possible but clearly it is an issue, and it will be easier to evolve rules for special industrial zones."