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FICCI President seeks investment-led budget

02
Jun '09
Mr. Harsh Pati Singhania, President, FICCI, urged the Finance Minister to script a four-pronged strategy to push investment-led growth, stimulate demand through fiscal measures, launch a second green revolution and give a fillip to social sector reforms. Such a braodbased strategy, he said would pave the way for bringing back the growth trajectory to 9% and lead to financial and social inclusion.

In his pre-budget meeting with Mr. Pranab Mukherjee, Union Finance Minister, the FICCI President pointed out that the need of the hour was to beef up growth through ceaseless efforts aimed at STEPPING UP INVESTMENT.

Mr. Singhania suggested the following steps:
• Reintroduce investment allowance
• Restore the depreciation rate to 25%
• Provide100% depreciation for investments made through Energy Service Companies
• Abolish Fringe Benefit Tax
• Remove the cascading impact of DDT
• Consider lowering the corporate tax rate from 30% by a few percentage points
• Extend tax holiday benefit for Power Projects beyond 2010
• Fiscal sops to boost renewable energy development
• Raise Maximum tax bracket for personal income tax

Mr. Singhania appealed to the Finance Minister to give a boost to AGRICULTURE & AGRI BUSINESS by:
• Giving infrastructure status for the cold chain projects which are the essential backbone of a second green revolution.
• Offering weighted deduction of 150% for investments in agri infrastructure, agri R&D and extension services.
• Shifting the current policy of categorizing agri infrastructure investments such as cold chains from 'indirect category' to the 'direct category' of priority lending by banks.

For SOCIAL SECTOR development, the FICCI President offered three critical suggestions:

i) HEALTH:

Target private sector investments in healthcare, healthcare industry be granted infrastructure status.

ii) EDUCATION:

a. Introduce a school voucher for children of BPL families who are in the primary and secondary school age group. This voucher of a specified amount can be encashed by them against fee in a school of their choice. This will improve our government school through competition and encourage creation of thousands of recognized schools by charitable trusts and socially minded entrepreneurs.

b. Announce setting up of an Education Promotion Finance Company along the lines of HDFC to provide educational loans at affordable rates. The Education Promotion Finance Company should offer long term education loans which can then be deducted from the borrower's salary when employed subsequently.

iii) HOUSING:

a. Restore with tax holidays for undertaking low cost housing projects.

b. Exempt low cost housing industry from service tax.

On the EXPORT front, Mr. Singhania called for the following steps:
• Continue of the tax holidays for 100per cent EOUs, Undertakings in FTZs, Industrial Development Parks and extended beyond 2010


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