The Hindu Business Line : India Inc seeks fund to buy high-tech manufacturing cos abroad

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India Inc seeks fund to buy high-tech manufacturing cos abroad

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Industry captains put forth suggestions to boost growth

India Inc is also understood to have demanded the introduction of goods and services tax at the earliest rather than waiting for 2010.

THE FINANCE MINISTER, Mr P. Chidambaram, with the Minister of State, Mr Pawan Kumar Bansal, and the Finance Secretary, Mr Adarsh Kishore, briefing the media in the Capital on Wednesday. - Kamal Narang

New Delhi , July 5

A national fund to enable Indian companies to acquire high-tech manufacturing companies abroad, self-certification by companies on compliance with laws and incentives for investments in select clusters where employment intensive industries could be located are among the suggestions that corporate India submitted to the Government on Wednesday for improving industrial growth in the country.

Briefing newspersons after a two-hour long interactive session with captains of industry, the Finance Minister, Mr P. Chidambaram, said that Indian industry wanted a national fund for acquiring high-tech manufacturing companies abroad so that they could leapfrog to the next level of technology.

"They want the funds to be made available so that they can acquire the technology and absorb it in the Indian manufacturing sector," he said.

Potential for employment

Elaborating on a sample of suggestions that were made during the interactive session, Mr Chidambaram said that corporate India wants the Government to incentivise infrastructure (through fiscal concessions) in certain special manufacturing clusters where industries that have a potential to employ large number of people (such as footwear and apparel) could be located.

"These clusters are not special economic zones, but they are to be located in the domestic tariff area," he said, adding that such clusters could also help in affirmative action.

He also said that a reference was made to more jobs potential for Scheduled Castes (SCs) and Scheduled Tribes (STs) if such clusters were to be located in the backward States.

Fiscal concessions

Corporate India also sought fiscal concessions on the investments made by them in Indian technical institutes (ITIs). "They want 150 per cent weighted tax deduction on the investments made by them in such ITIs," Mr K.M. Chandrasekhar, Revenue Secretary, told Business Line.

Self-certification

The apex industry associations have also suggested that self-certification on compliance with laws should be accepted by the Government for large number of laws.

"They have promised to give a list of laws where self-certification should take place and inspections should be an exception," Mr Chidambaram said.

On the problems faced in the power sector front, the industry told the Finance Minister that the Government should not be satisfied with the passage of Electricity Act or announcement of national electricity policy.

Mr Chidambaram said that the industry wanted the problems in wheeling power, state taxes on power consumption and issues such as payment security mechanism, especially when one is obliged to sell power or surplus power to State Electricity Boards (SEBs), to be addressed.

Goods & services tax

India Inc is also understood to have demanded the introduction of goods and services tax (GST) at the earliest rather than waiting for 2010. Mr Chandrasekhar said that there were two sets of recommendations on the rate of GST. While a section of industry wanted the GST rate to be pegged at 15 per cent, the Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested that the GST rate should be 20 per cent.

Mr Chidambaram said that, in consultation with the Prime Minister, mechanism would be set up by which these suggestions of the industry could be examined and pursued by the ministries concerned.

Besides the Presidents of FICCI, CII, Assocham and PHDCCI, the Finance Secretary, Mr Adarsh Kishore, the Secretary in the Department of Economic Affairs (DEA), Mr Ashok Jha, also attended the meeting.