Surcharge on corporate tax should be removed : ASSOCHAM Chief

17 Feb '09

3 min read

Finance Minister in his Vote on Account spelt out host of measures for new government to roll out when it presents the full budget for 2009-10 to meet increasing global challenges of economic meltdown by ensuring growth, employment, cut in taxes and containment in fiscal deficit.

In a statement issued, the ASSOCHAM President, Mr. Sajjan Jindal said that industry did expect that at least surcharge on corporate taxes would be removed and new corporate tax ceiling introduced. There was no hint in this direction by the Finance Minister in his interim-budget. Likewise on infrastructure refinancing, the focus is there in the budget but directions are not clearly laid out.

Mr. Sajjan Jindal further said that in the wake of the falling industrial production, decrease in exports, the Finance Minister strengthened many of his social schemes and enhanced allocations for rural infrastructure which according to ASSOCHAM will become main sources for demand generation.

The Chamber Chief said that indeed, the ASSOCHAM was expecting a 3rd and last stimulus package in the interim-budget which however did not happen as it seems Mr. Mukherjee restrained himself from presenting it and rather chose new government to unveil the package on lines anticipated by industry.

Mr. Jindal, however, said that Mr. Mukherjee made lot of good allocations for increasing social schemes such as subsidized education in ITIs for widows, housing loans upto Rs.3 lakh for rural poor @ 7% interest rate and increase subsidies for fertilizer, food and petroleum.

“What is important in the budget is growth path that the new government would have to ensure with decrease in duty rates both on direct and indirect front including rationalization on import tariffs. Sufficient indications have been dropped for enhancing India's external trade and clear hints are that Indian economy would have to drive growth mostly from meeting domestic demand as slowdown would be their”, said Mr. Jindal.

Another issue that has been brought on fore by the Finance Minister that Indian Inc. would have to encounter hard times as exports could touch only 17.1% growth in first 9 months with industrial production falling by 2% in December.

Mr. Jindal said that it is heartening to note that the UPA government in recent times gave approvals for 50 infrastructure projects worth over Rs.67,000 crore and FDI's inflow between April-November 2008 exceeded $ 23.3 billion by registering a growth of 45% as compared to last year despite slowdown.

Associated Chambers of Commerce and Industry of India

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