Business Daily from THE HINDU group of publications
Monday, Nov 20, 2006
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Business Daily from THE HINDU group of publications Monday, Nov 20, 2006 ePaper |
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Industry & Economy
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Budget `Allow higher foreign equity in telecom' Our Bureau
New Delhi , Nov. 19 The Government should allow higher foreign equity in telecom, insurance, pension and other similar sectors to mobilise additional resources for infrastructure investment, according to industry chamber FICCI. In its pre-Budget submission to the Government, the chamber has suggested that fringe benefit tax (FBT) be withdrawn for all legitimate and genuine business expenses, especially those incurred on sales promotion. The Government must finalise the structure of goods and services tax (GST) and the roadmap for its implementation. The chamber believes that replacement of multiple taxes by GST will increase the tax GDP ratio by two per cent. The Central sales tax should be phased out expeditiously as its imposition has adverse impact on growth and competitiveness of trade and industry. The excise duty rate should be reduced from the current level of 16 per cent to 14 per cent in 2007-08 and later reduced to two per cent. A two per cent reduction in excise duty with consequential lower incidence of State and local taxes will result in a 3-5 per cent reduction in prices. This, in turn, will increase the demand for manufactured goods leading to higher industrial growth and reduced inflation, the chamber said.
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