Financial Daily from THE HINDU group of publications
Saturday, Apr 23, 2005
Financial Daily from THE HINDU group of publications Saturday, Apr 23, 2005 |
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Industry & Economy
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Budget Address growth-inhibiting proposals in Finance Bill, says FICCI Our Bureau
New Delhi , April 22 THE Federation of Indian Chambers of Commerce and Industry (FICCI) has said the Budget proposals that inhibit growth of credit and investments in the private corporate sector need to be addressed in the Finance Bill to ensure that manufacturing sector is not starved of growth-inducing resources. The chamber has said that proposals for consolidation of fiscal management through tax rationalisation and slowing down growth of big ticket spending are unlikely to boost revenue receipts as new taxes on the corporate sector would severely hit the tottering savings and investments and net government borrowings may crowd out credit flow to the sector. FICCI has pointed out that zero budget receipts from disinvestment of equity in public sector units send negative signals. It also said that firm time-bound targets were needed for proper targeting of budget subsidies and de-reservation of 108 products in the small-scale industry segment should be followed up with flexible labour regulations. In spite of the slackening of savings and investments level in the corporate sector in recent years corporate tax collections has grown significantly. FICCI held that any new taxes on the corporate sector would dampen the robust growth of tax collections and further hurt investment sentiments. FICCI has also expressed apprehension that high growth of gross and net borrowings of the Government may crowd out credit for the private sector, raise credit costs and have a negative impact on money supply and monetary policies. The chamber held that the growth of the registered manufacturing sector would be facilitated through lower tax rates and more flexible regulations especially with regard to use of labour.
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