Customs duty may be lowered to 20%

Finance Minister Yashwant Sinha on Tuesday hinted at bringing down peak customs duty to 20 per cent from the present 35 per cent in the Budget, besides a slew of measures to make Indian industry competitive, but was non-committal on lowering interest rates on contractual savings like Provident Fund.

"Our stated objective is to reduce peak import duty to 20 per cent," Sinha said, adding it was time that tariff and non-tariff barriers were brought down.

Emphasising that ten years was sufficient time for India to become competitive, Sinha told India Today Conclave that industry should become competitive to meet the challenges of globalisation by moving away from the era of protectionism.

The only mantra for Indian industry is to be efficient, Sinha said, adding it should perform so that people got a "better deal" as in the rest of the world.

Later Sinha told reporters that an expert committee in the Labour Ministry was going into the issue of interest rate on contractual savings like Provident Fund but "I have not received any recommendations yet."

There are reports that it could suggest lowering of interest rates from the present 9.5 per cent to 8.5 per cent in the face of lower inflation to help in moving towards a softer interest rate regime.

On the need to increase defence allocation, Sinha said ideally, he would prefer to spend more on developmental needs, but no country could afford to sacrifice national security.

"It is in the interest of all of us to avoid a war. But If war is thrust upon us we would not shy away from it," Sinha said.

"Left to myself I would like to spend on development needs. But till the regional and security situation improves, we will have to spend on defence," he said.

Stressing the need for evolving a consensus to shun populism, Sinha said it was time that political parties came together to take a united stand.

Gone are the days when elections were held once in five years, Sinha said, adding there are elections every six months and politicians both from ruling and opposition parties should join hands to say "thus far and no more."

"Political populism is becoming unsustainable," he said, adding consensus should be evolved for better governance so that there could be efficient use of scarce resources.

PTI