The Hindu Business Line : Assocham moots setting up of agri economic zone

Suggestions
The Government will have to ensure adequate investments in areas such as pre and post-harvest management, food processing, export promotion-related activities.

Our Bureau

Mumbai, Nov 22 To make agriculture growth of four per cent a reality and achieve a sustained economic growth of 11 per cent, the Government should create agriculture economic zone on the lines of SEZ, apart from making India a common economic market by initiating the process of implementing goods and services tax (GST), according to Assocham.

At the meeting with the officials of the Finance Ministry, chaired by the Revenue Secretary, Mr P.V. Bhide, the trade body said the Government will have to ensure adequate investments in the areas such as pre and post-harvest management, food processing, export promotion-related activities, specific crop-related activities and application of R&D to the agricultural production.

quality produce

To ensure that there is adequate quality produce, investment in irrigation, transport, rural electrification, telecom connectivity will be required apart from pre and post-harvesting activities.

This will help develop rural infrastructure as well as provide employment to labourers engaged in agriculture, it said.

Apart from these, the Government has to reduce excise duty rates, rationalise taxes on key infrastructure, encourage indigenous R&D and promote India as a global headquarters of business enterprises. GST needs to be implemented at the earliest so that the cascading effect of taxes is removed from indigenous manufacturing and services cost, transaction cost is reduced and trade and industry grow faster by taking advantage of scale economy and efficient supply chain, Assocham said. It has also suggested that the CST (Central sales tax) rate should be reduced from three per cent to two per cent as a step towards creating Indian common market, excise and service tax be integrated into the Central GST during 08-09 and sugar and textiles should be brought from special duty regime to VAT regime.

The excise duty rate on automobiles should also be moderated by removing the special excise duty on this sector.

Upgrade infrastructure

To upgrade significantly the infrastructure to sustain economic growth, the Chamber President, Mr Venugopal N. Dhoot, said the service tax and excise duty on inputs during the investment phase should be exempted from tax or refunded. Tax may be collected once the projects are put to use and start earning revenue.

For a strong research base and pool of intellectual properties, Assocham has proposed that scientific research in emerging sectors such as bio-technology, nanotechnology, industrial deigns, IT, telecom, food processing, medicines, engineering etc should be given favourable tax treatment under direct and indirect taxes and the double taxation of intellectual properties under service tax and VAT regime should be discontinued.

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