Business Today
Industry looks for its pound of flesh from Pranab

Indian industry hopes that FM Pranab Mukherjee would offer a host of sops for nontax payers and the salaried class in the upcoming budget of 2011-12.

Now that the Railway Budget has given a clear indication for the presentation of a people-oriented Budget on Monday, the industry asking for its pound of flesh. There is hope that the Budget would offer a host of sops for nontax payers and the salaried class.

But industry wants stability in the economy at all costs.

"Given the risks facing the Indian economy, complacency is hardly justified. It is essential that the Budget demonstrates the Centre's commitment to make the economy more resilient. The government must rein in fiscal deficit, which at 5.8 per cent," said Vijay Kalantri, president, All India Association of Industries (AIAI).

The FM can utilise the buoyant tax receipts (direct taxes up 20 per cent and indirect taxes 40 per cent) to cut the fiscal deficit rather than again splurge on subsidies, social security schemes and direct transfers for improving the lot of the aam aadmi, Kalantri said.

He said that with financial inclusion becoming the national and Centre's imperative in the last several years, the matter of small & medium enterprises (SMEs) finance has taken centre stage.

"It is important to provide affordable finance to the financially-excluded SME sector. Allowing easier finance to millions of small enterprises is a faster way of bringing prosperity to the masses than banking on unwieldy models for financial inclusion," AIAI said. With 26 million SMEs providing jobs to 60 million people and 1.3 million new jobs every year, SMEs can ensure inclusive growth, it added.

AIAI said the traditional approach to SME financing, based on rigid credit assessment frameworks needs to be replaced with flexible models to ensure agility and achieve cost efficiencies.

Meanwhile, gem & jewellry exporters have stepped up demand to make their business viable. They are asking for allowing import of gold against standby letter of credit. And letter of credit must be allowed for export markets as well as for domestic markets for a period of one year to prevent jewellry manufacturers from incurring losses.

They are also demanding that the high import duty on gold scrap and gold concentrates for refining in India should be brought down to the import duty levied on pure gold bullion so that refineries could start functioning again.

"This will encourage gold refining in India and increase the employment. The implementation of these measures will enable us to bounce back and re-establish our prominence in the international markets and also ensure the longterm growth of the industry. We are hopeful of a positive response to our recommendations and look forward to seeing these reflected in the coming budget," said Nilesh Parekh, chairman, Shree Ganesh jewellry House Ltd.

India is the world's largest manufacturing centre for gems and jewellry with the industry contributing over 12 per cent to the total export earnings of the country and employs 1.5 million people.

Leading players in the Rs 70,000-crore Indian packaging industry are asking for concessions like continuance of Duty Entitlement Pass Book (DEPB) scheme, removal of customs duty on soda ash, zero import duty on packaging machinery and some other measures to help bring down the cost of glass and glassware in India.

"The untapped glass packaging sector needs more investments. The industry has been bearing the brunt of price hike for raw materials and imposition of various duties. We want the government to address various issues," said Mukul Somany, vice chairman & managing director, Hindusthan National Glass & Industries Ltd.

Courtesy: Mail Today
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