Home > Business > Business Headline > Report
What I couldn't tell the FM
January 13, 2003 14:28 IST
With the finance minister deciding against holding pre-Budget meetings this year, we start a series on what leading businessmen, economists and politicians wanted to tell the minister, but couldn't do so:
A C Muthiah, President, Ficci (Federation of Indian Chambers of Commerce and Industry)
"The three great weaknesses of the tax system are tax administration, discretionary authority of tax officers, and the absence of computerisation.
"Ficci has already submitted its detailed proposals on economic issues, direct taxes and indirect taxes.
"We feel that with all the stability looking good, there is an unusually good opportunity for the government to take steps that will accelerate growth and boost it to 6 per cent now and more later.
"The overall thrust of our reforms should be on measures to stimulate demand, measures for encouraging private investment and capital formation and reduction in taxes to encourage consumer spending.
"Industry is expecting a lot of thrust on manufacturing, infrastructure and agriculture."
- Uniform duty of 16 per cent (to be reduced to 14 per cent in 2004-05) on all fibres and yarns.
- Uniform 12 per cent on all fabrics which are not processed till 2004-05.
- Removal of exemptions.
- Removal of deemed credit schemes, credit to be extended only on production of duty paying documents.
- General SSI duty exemption for ready-made garments to be removed, and
- The Additional Duty of Excise (Goods of Special Importance) Act, to be amended from 2005 to allow states to levy sales tax on textile fabrics.
- Rationalise basic excise duty on yarn (other than POY and PFY), woven and knitted fabrics, garments and textile made-ups at 8 per cent.
- Special excise duty of 16 per cent on PFY to be reduced to 8 per cent in 2003-04 and zero in 2004-05.
- Additional excise duty levied in lieu of sales tax to be withdrawn and replaced by VAT concurrent with sales tax abolition or Central sales tax at zero rate.
- Additional excise duty at 15 per cent should be scrapped, and
- Withdraw SSI reservation for knitting sector.
- Duty on PFY should be reduced to 8 per cent, and
- Excise duty on grey fabrics at 12 per cent should be reduced to a minimum 6 per cent.
Run-Up to the Budget 2003