Prescriptions and wishlists

Bold reform measures to sustain high growth trajectory figure high

Prime Minister’s Economic Advisory Council (PMEAC)

 

• Exit from stimulus. 
• 9.0 per cent growth in 2011-12. 
• Inflation at 7.0 per cent by March 2011. 
• Contain inflation by focusing both on monetary and fiscal policies and supply side management. 
• Pace of infrastructure creation has to be stepped up with renewed focus on the power sector. 
• Continue efforts to contain current account deficit at 2-2.5 per cent of GDP and in parallel encourage flow of external investments into the country. 
• Greater attention to agriculture including on seed development, management of water and soil fertility and improving delivery system 
• Urgency in the implementation of goods and services tax (GST). 
• Budgeted level of fiscal deficit and revenue deficit still beyond comfort zone.

Economic Survey 2010-11

• Better convergence of schemes to avoid duplication and leakage.
• Private sector participation in social sectors.
• Huge capacity addition in infrastructure in a time bound manner. 
• Urgent need to streamline land acquisition and environmental clearances for infrastructure projects. 
• Bringing parity between the compensation package admissible under the Land Acquisition Act, 1984, and that applicable to land acquisition under the National Highways Act, 1956. 
• Investment in building managerial and technical capabilities of executing agencies at par with the private sector. 
• Second Green Revolution with technological break-through in agricultural sector. 
• Prioritisation of targeted development of rainfed area and effective marketing links be ensured for better returns to the farmers. 
• Further improvements in the Mahatma Gandhi National Rural Employment Guarantee scheme. 
• Efficient taxation of goods and services by a new GST. 
• Need to explore avenues for increasing investment in infrastructure. 
• Need for deepening of the corporate bond market. 
• FDI in retail. 
• Inflation continues to be a cause for concern. Global economy on the upturn, to support growth momentum. 
• Trade deficit set to narrow. 
• Focus on Aam aadmi and higher funds for flagship programmes, implementation key to realizing the desired outcomes

Industry Chambers Confederation of Indian Industry (CII)

• Encourage private sector participation through various tax measures, including 150% tax exemption on expense incurred on new technology and inputs.
• Do away with the levy of MAT on infrastructure companies as it has diluted the incentives provided under section 80-IA to the sector.
• Reintroduce of Section 10 (23G) of the Income Tax Act, which provided tax exemption of interest and Long Term Capital Gains in the hands of infrastructure capital companies. 
• Increase deprecation rates on plant & machinery from 15 percent to 25 percent and extending R&D incentives available u/s 35 (2AB) to all sectors. 
• FDI in multi-brand retail should be opened up, higher FDI should be allowed in the defense sector. 
• Early passage of Insurance Bill to raise the FDI limit from 26% to 49%. 
• Develop a deep and liquid corporate bond market. 
• Continue with the existing peak rate of customs duty (10%). Status quo on the general rate of 10% excise duty and 10% services tax, since these are at par with the proposed Central GST rate of 10%. 
• Reduce CST from 2% to NIL, since no credit is available on this tax. 
• Reduction in the corporate tax rate from 30% to 25% together with abolition of surcharge and cess.

Federation of Indian Chambers of Commerce and Industry (Ficci)

• No rollback of stimulus.
• Abolish surcharge and education cess.
• Reduce Corporate tax rate to some extent. 
• Remove cascading impact of Dividend Distribution Tax. 
• Rationalize the MAT as a specified percentage - 50 per cent - of basic corporate tax rate. 
• Extend the period of profit-linked incentives provided for infrastructure and crucial sectors (including for developing industrial parks and for power generation), for some more time. 
• Make the investment-linked incentive really meaningful, by allowing the losses of specified business of the assessee to be set-off / carry-forward from his other profit-making businesses, instead of restricting it to only from his specified businesses. 
• Restore withholding tax exemption on interest payable on foreign commercial borrowings, as also the tax exemption of interest income of an infrastructure capital fund / an infrastructure capital company. 
• Peak customs duty rate of 10% needs to be retained for sometime more. 
• CST rate be reduced from 2% to 1% with effect from 1st April, 2011. 
• Extend tax holiday benefit for EoUs and undertakings involved in FTZs for another 2-3 years.