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Our Bureau

Bangalore, Nov. 2 The global sluggish economy was bound to affect Karnataka’s industrial production, which was expected to witness a decline reflecting on the State’s commercial tax collection.

The industrial units are facing the heat with orders from international and domestics market shrinking or deferred due to the impact of the economic slowdown. This would impact capacity utilisation by the industrial units, said Mr D. Muralidhar, President of the Federation of Karnataka Chambers of Commerce.

Karnataka’s exports are estimated at about Rs 1,00,000 crore. IT and ITeS constitute 50 per cent.

According to Mr Muralidhar, the recessionary pressure could result in deficit in tax collection by 20 to 30 per cent against the State’s target of Rs 20,000 crore.

He said the State should strengthen the agriculture sector, while infrastructure, particularly power sector, should also get priority. To increase the focus on agriculture, Mr Muralidhar felt, the Planning Commission and the State Planning Board should evolve strategies for putting the sector on a key pedestal to accelerate the growth of the State’s economy.

The President of chamber said FKCCI has decided to be a more responsive organisation to attend to the comprehensive needs of both industry and trade for a balanced growth, unlike in the past when trade used to dominate FKCCI’s focus.

It plans to set up a research cell to give specific regional focus to the State. The cell will build and maintain a bank of information on business and economic indicators across sectors and use the database to prepare working papers on current issues on taxes, study implications of WTO on Karnataka and focus on specific problems of different sectors of the State economy.

Mr Muralidhar said the Government should set up a separate ministry for investment for a consolidated approach to all sectors.

More Stories on : Taxation | Karnataka

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