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What I couldn't tell the FM (Part IV)
January 23, 2003 13:27 IST
With the Finance Minister deciding against holding pre-Budget meetings this year, this series looks at what leading businessmen, economists and politicians wanted to tell the minister, but couldn't do so.
P K Jain, president, PHDCCI
We have entered the Tenth Plan against the backdrop of sagging growth in manufacturing, and a general decline of investment demand. In the next fiscal, we should create an atmosphere for growth, revive demand and improve the investment climate. There is an urgent need to rein in the fiscal deficit.
The subsidy burden, at 14 per cent of the GDP should be reined in and government finances diverted to more productive use.
The divestment process should be hastened and the proceeds should be used for investment in infrastructure. The passage of the Fiscal Responsibility and Budget Management Bills should be expedited to ensure a qualitative change in the management of government finances.
On the indirect tax front, the value-added tax should be implemented with effect from April 1, 2003. More services should be brought under the tax net, as also farm income. Moreover, the minimum alternate tax should be abolished because it reduces corporate savings. Otherwise, relief from minimum alternate tax should be provided.