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Making India more attractive for investors

Our Bureau New Delhi | Updated on February 10, 2021 Published on February 10, 2021

YSRCP leader V Vijayasai Reddy   -  PTI

Panel to Centre: learn from policy changes made by Vietnam, Taiwan and Thailand

The Parliamentary Standing Committee on Commerce has recommended a slew of measures, including changes in GST rates of certain commodities, to improve the investment scenario in the country.

The panel, headed by YSRCP leader V Vijayasai Reddy, said the main challenges faced by the country presently included administrative and regulatory hurdles, inadequate and costly credit facility, tedious land acquisition procedure, inadequate infrastructure facilities, high logistics cost and large unorganised manufacturing sector, among others.

The panel, in its report titled “Attracting Investment in Post-Covid Economy: Challenges and Opportunities for India”, welcomed the policy changes and incentive schemes brought in by the Centre to overcome the challenges. However, success depends on the implementation of the reforms through seamless co-ordination between various Ministries and Departments of the Centre and States.

Stressing the need to sensitise the State machinery/administration towards the importance of investment and business, the report said countries are competing to attract foreign investors. “The Committee recommends that the Department (the Department for Promotion of Industry and Internal Trade) should look into the policy changes brought in by countries such as Vietnam, Taiwan, Thailand, etc that made them more attractive to the companies shifting their bases from China,” the report said. It asked the Centre to enter into more international trade agreements that are beneficial to the country in order to boost its international trade relations.

Consensus on land reforms

The panel said a long-term solution should be worked out in a structured manner to the land issue. It suggested that the Centre constitute an Empowered Committee of State Ministers and the concerned Central Ministers to discuss issues regarding land acquisition and build a consensus on land reforms, in consultation with industry and other stakeholders. “The Empowered Committee should look into issues relating to land acquisition policies, digitisation of land records and simplifying administrative procedures like registration and land use conversion. Further, the possibility of having a land bank that will be made readily available for developmental projects may be discussed with concerned stakeholders,” the report said.

For boosting domestic demand in automobile sector, the panel suggested that the rate of GST should be reduced from 28 per cent to 18 per cent for all categories of vehicles and auto components. It also recommended an incentive-based vehicle scrappage scheme that should be introduced at the earliest.

To help the pharmaceutical industries during periods of high demand, the panel said an increase in 15 per cent over the approved pollution load may be allowed for a particular month. “Further, the requirement of environmental clearance for additional pollution load may be insisted only when a particular plant exhibits an increase in pollution for six consecutive months,” the report said.

Inflow of imported toys

It also suggested a time-bound approval system for grant of consent to establish and operate from the date of submission of complete application may be developed by the State Pollution Control Board.

The report said the panel is deeply concerned by the huge inflow of imported toys from China and its adverse impact on the domestic industries. “The Committee is of the opinion that the development and nurturing of domestic industry and the promotion of domestic manufacturing of toys is of utmost importance. The Committee, therefore, recommends that concerted effort should be taken to promote domestic toy manufacturing,” the report said.

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Published on February 10, 2021
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