Stimulus package should continue: Assocham

Assocham wants the govt to continue the stimulus package in order to sustain growth rate.

Although Indian economy is, by all means, back on a rapid growth trajectory, the Associated Chambers of Commerce and Industry of India (Assocham) wants the government to continue the stimulus package in order to sustain growth rate.

Lack of growth in agriculture is also a cause of worry for the apex chamber and has called for joint action by the Centre and the states for its resurrection. In an exclusive interview with Biplob Ghosal of Zeenews.com, Dr Swati Piramal, President, Assocham speaks about all including the budget, rising food prices and the agriculture growth. Biplob: What are your expectations from the Union Budget? Dr Swati: We expect a balanced budget in which at least stimulus package is not withdrawn and should be continued for another fiscal, i.e. 2010-11. We also expect reduction in corporate tax by 5 percent. Assocham does not want Minimum Alternate Tax (MAT). It wants ‘holidays scheme’ for infrastructure projects to continue and extended beyond 2015. On personal income-tax, the ceiling should be raised to Rs 5 lakh. Biplob: Rising food price is showing no signs of abating? Where do you think is the government falling short? Dr Swati: Food pricing is a concern not only for government but equally for the industry as well. There should be stringent action against hoarding and supplies be strengthened. Irrigation targets should be met to increase agriculture produce and agriculture sector should be exposed to reforms. Assocham also wants educational health and medical institutions to be taxed as these have surpluses and run on commercial lines without contributing anything to government kitty. Biplob: What are Assocham’s specific demands from the government to hasten the revival of economy? Dr Swati: Disinvestment is the top agenda of Assocham. It will help government contain fiscal deficit, generate resources for infrastructure funding and spur-up growth targets as disinvestment of public utilities will bring in lot of money. Biplob: What are your views on tax reforms, especially in relation to Goods & Services Tax? Dr Swati: Assocham wants Goods & Service Tax to be executed as early as possible because: this will eliminate multiplicity of taxation and put in place a transparent tax system which will not be cumbersome. Assocham does not believe that GST will be rolled out in first few months of next fiscal. Biplob: The markets have performed reasonably well in the recent past. How are you expecting it to move in 2010? Dr Swati: Capital market will continue to do well as Reserve Bank of India has rolled out a balanced monetary policy for remaining period of current fiscal. Biplob: Is there any chance of Dubai like crisis in India? Dr Swati: No. Biplob: Don’t you think stimulus package should be withdrawn, given that various industries have posted good Q3 earnings and industrial output has shown a growth? Dr Swati: The government should continue the steps taken earlier to stimulate the economy as these measures have helped the industry to post a good growth rate. Biplob: India’s industry output is increasing amid fears of a contracting agriculture sector; is our developmental model flawed? Dr Swati: Agriculture is in for problem. We expect negative agriculture growth in current fiscal and cannot be positive about it until this sector is collectively saved by centre as well as states.