Corporate India has pitched for steps from the Government and the Reserve Bank of India to bring down consumer finance rates by at least 100 basis points, ahead of the upcoming festive season.

Any reduction in consumer finance rates would stimulate purchases of automobiles, durables and boost industrial activity in these sectors, FICCI President R.V Kanoria told Business Line after a meeting with Finance Minister P. Chidambaram had with apex industry chambers here on Wednesday.

At the meeting, convened to seek industry suggestions for revving up investments and growth, India Inc also suggested reduction in fiscal deficit as a step towards encouraging RBI to cut interest rates.

Industry chambers have been contending that high interest rates were stifling industrial growth and policy interventions were needed.

The Finance Minister is understood to have said that the Government would focus on fiscal consolidation. He also asked industry to help build support for passage of crucial Bills on banking, insurance and pension.

India Inc submitted that ground level issues — land acquisition, environment clearances and power problems – were constraining private sector investments.

While welcoming bold reform announcements made by the Government after Chidambaram took over as Finance Minister, they pointed out that there was still some way to go to put the industry and economy back on track. More bold reform measures were needed, they said.

CII President Adi Godrej said the key areas of intervention should include the fiscal situation, starting the investment cycle, simplification of taxes and means to rejuvenate the manufacturing sector.

He also suggested moving to market-based price for diesel, as suggested by the Kelkar Committee.

Industry captains expressed concern over the slow pace in the introduction of goods and services tax system. There is a general sense that this important reform is not getting the political traction it needs at the Centre or the States, Godrej said.

He also sought 25 per cent accelerated depreciation for investments in plant and machinery, stating that this would help in a pick-up in manufacturing, without affecting revenues.

Besides demanding 250 per cent weighted tax deduction on expenditure incurred by companies on “going green”, CII also suggested that Government should consider establishment of a sovereign wealth fund.

Assocham President Rajkumar Dhoot said that the controversial GAAR should be taken off the table. He also called for scrapping of the Mines Nationalisation Act.

Dhoot suggested that the Revenue Department should come up with a detailed circular explaining the situation in which retrospective amendments to income tax law would not be applicable.

>srivats.kr@thehindu.co.in

Related Topics