Industry associations have sought tax concessions from the upcoming interim budget besides cuts in interest rates for revival of the Indian economy.
The RBI's move to tighten monetary policy over the last four quarters is primarily responsible for slowdown in demand and loss of investor confidence, feel associations.
CII has sought reduction in customs duty on goods such as non-coking coal, petroleum coke, non-ferrous metal scrap and melting scrap of stainless steel and ferro-nickel. It has also recommended that excise duty of 16% on drugs containing alcohol and narcotic drugs should be reduced to 4%.
To further help exporters, CII has asked for more incentives for exporters and withdrawal of retrospective amendment of section 80 HHC, besides service tax exemption for engineering goods and subsidised ECGC cover charges. According to the 80 HHC amendment, exporters having a turnover of more than Rs 10 crore are liable to pay income tax retrospectively w.e.f from April 1, 1998.
CII said that the actions taken by the government so far have been appropriate, but would put strain on the fiscal situation. "It is unlikely that it would be possible for the government to look at any "giveaways"," it said in a statement issued on Thursday.
Another industry body Ficci president and member of parliament Rajeev Chandrasekhar said, "Efforts should be made to bring back investors' confidence and enhance consumer spending. We are hopeful that the government will come up with third stimulus package as the first and second haven't worked." Mr Chandrasekhar whose term as the president of Ficci expires on Thursday, said, "We are expecting some direct tax relief and investment allowances in this budget."
Industry body Assocham, feels that excise duty concessions are imperative for revival of growth across sectors, particularly manufacturing. "In the absence of a stimulus package, industry will have no other option but to downsize its operation and employment and hold back expansion plans," said Assocham president Sajjan Jindal.