In a closed-door meeting with apex industry bodies, the finance minister has categorically shot down India Incs demand for tax-free manufacturing.
In fact, even for claiming tax concessions, the FM has asked industry to come up with specific suggestions mutually viable to both the government as well as corporates. One hint that the FM dropped was granting a 150% tax benefit to industry if it rigorously adopts ITIs, at the rate of 100 per year.
According to well-placed industry sources who were part of the meeting, the FM also expressed concern over the fact that there were no takers for the eight coal blocks released recently by the government.
The FM said, The demand of industry for tax benefits could not be considered only in the name of spurring manufacturing. In all, the FM had raised 17 issues and urged industrialists to come up with specific answers to them. The sources said there were certain issues mostly related to environment, infrastructure and power on which even the industry did not have a clear stand.
The FM also assured industrialists that the issue of speedier environmental clearances and power concerns was being taken up, and the government had convened a ministerial meeting tomorrow to discuss this.
The FM also hinted at extending the governments National Rural Employment Guarantee Act (NREGA) to manufacturing. The most important poser that the finance minister had for the industry was, why there wasnt any significant investment in power & infrastructure despite all possible assistance from the government.
From the industry side, Pepsi India chief Rajiv Bakshi raised the point that the Bureau of Indian Standards (BIS) is not accepted in the US and a new ingredient incorporated in the PFA takes a lot of time for clearance. Vikram Thapar, head, KCT Coal Sales, voiced concerns over the fact that only untenable mining blocks are being opened for private sector participation.
PM Sinha, chairman, Bata India, said retail infrastructure can increase employment levels for even part-time workers. Surinder Kapur, chairman & managing director of Sona Koyo, highlighted the need of the manufacturing sector to be able to get fiscal incentives so that they can procure funds for skill development in ITIs.