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India Inc raises pitch for tax sops
May, 13th 2009

India Inc on Tuesday raised the pitch for more tax concessions and further cut in interest rates to fight declining industrial output, which contracted by 2.3 per cent in March.

Lending rates continue to remain fairly high and act as a disincentive for fresh investments, industry body Ficci said.

"We hope that the effective lending rates of banks would come down further keeping in line with the policy rate cuts already announced by the RBI. This would push investments and bring the consumer back to the market," it said.

The decline in industrial production is driven by the manufacturing sector that constitutes nearly 80 per cent of index of industrial production and is a matter of concern.

"What is of concern is that some of the core industries like basic metal and alloys have shown deep deceleration. This reflects a serious demand slowdown, sluggishness in investment activity and a continuous fall in exports," Ficci President Harsh Pati Singhania said.

PHDCCI has said that the government should invest more in infrastructure building and skill development.

"Ensuring adequate credit availability to industry at reasonable rates is a priority to boost demand," it said, adding that rationalisation of taxes and a special incentive package for sectors worst affected by the slowdown is also necessary to stimulate demand.

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