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Easing of indirect taxes to revive economy
May, 06th 2009

The Confederation of Indian Industry (CII) suggested further easing of indirect taxes, lowering of personal income tax and additional investment in infrastructure to revive the Indian economy in the wake of the economic downturn.

"Some of the fiscal and monetary recommendations for immediate action will be easing of excise and service taxes for specific sectors," CII National President Venu Srinivasan told reporters here.

The Indian market would revive in the next six to eight months as some sectors, like automobiles, had been registering impressive sales figures in April, he said.

"There needs to be further reduction of Repo and reverse Repo rates by 50 basis points to 4.5 per cent and 3 per cent" he said, adding that industrial growth has also declined sharply since March.

He expressed satisfaction over the number of stimulus packages announced by the government in the past to boost the economy.

The government must ramp up infrastructure spending to nine per cent of GDP, he said, adding that there has to be substantial improvement in this sector as in China, which had built 100 cities with all facilities. "We need to build at least 20 such cities with better amenities."

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