The Confederation of Indian Industry lists a buffet of demands in its pre-Budget memorandum. Here's a dekko -- building world-class infrastructure, improving agricultural growth, empowering the youth and creating adequate employment opportunities.
The industry association focuses on 7 to 8 per cent GDP growth each year over the next ten years so that the GDP doubles. Further, it suggests making construction and concretising of village roads a major priority for 2004-05, by setting clear targets and financing plans.
The chamber calls for a 15 per cent additional depreciation to be given on plant and machinery for capacity growth of 10 per cent or more. This provision is currently available for additional capacity of 25 per cent or more.
Besides, the memo asks for the rural housing loans of banks to be counted as a part of the priority sector loans and advances. Also, the memo wants the rural housing portfolio of banks and housing finance companies to be accorded 'infrastructure status' under a variation of Sections 80IA and 80IB of the Income-Tax Act.
In Railways, the key recommendations are levying a 5 per cent across-the-board cess on passenger fares to create a Railway Development Fund and creating an independent Railways Tariff Regulatory Authority. In ports, the recommendations are establishing an independent regulatory authority for ports.
In civil aviation, the chamber has recommended the liberalisation of foreign direct investment in air transport services and the rationalisation of the aviation turbine fuel (ATF) prices. The CII has recommended fiscal reforms in the power sector in line withthe NK Singh Committee Report.
Stressing on agricultural growth of more than 3 per cent, the CII memo emphasizes easier transaction norms outside the mandi system.
Larger amounts of private investments should be mobilised for water management, storage, transportation, information technology, post-harvest mechanisation, to supplement government investment.
To encourage this, such investments should qualify for exemption from tax of profits similar to the investments in infrastructure under Section 80 (IA).
On direct and indirect taxes, CII recommended that corporate tax rate should be reduced to 30 per cent and remove the surcharge of 2.5 per cent. Withdrawal of dividend distribution tax, 15 per cent additional depreciation for increasing capacity by 10 per cent and extension of time limit for availing 150 per cent weighted R&D deduction are some of the other suggestions.
On indirect taxation, the chamber suggested the reduction of duty by 5 to 10 per centage points on raw materials, intermediates and components wherever possible so that the duty on these is at least 5% lower than the finished products. And on value added tax (VAT), CII said that Budget 2004-05 must clearly state the target date by which VAT will come into being, and the date should not be beyond 1st April, 2005.
