SME Times News Bureau | 08 Aug, 2019
In a meeting with Finance Minister Nirmala
Sitharaman on Thursday, industry leaders demanded urgent stimulus package for
economic revival.
"The economy requires a critical intervention by introducing a stimulus
package. We have suggested for a package of over Rs one lakh crore," he
said.
After the three-hour meeting, India Inc also said the government has assured
them that it would take action soon to revive the industry and push economic
growth, he said.
JSW Group Chairman Sajjan Jindal said: "It was decided that the government
is going to take action very soon to revive the industry and it is a matter of
sentiments. We got positive feedback from the finance minister". The
industry is suffering from issues in sectors like steel, NBFC, and automobile.
Piramal Enterprises Chairman Ajay Piramal said that the industry raised several
matters such as reluctance of banks to lend to the industry. "It is not
that there was a lack of liquidity in the banks, but lending is not taking
place. There is stress on the economy as far as NBFC sector was
concerned," he told reporters after the meeting.
He added that the NBFC issue is impacting sectors like auto, home loan, and
MSME. aceI am told that there will be action soon. So, we will wait for
that," he said.
Goenka said to boost exports and ensure stability, tax policies and schemes on
refunds and incentives should be made steady and continuous, without
intermittent changes. Given the fiscal constraints, the government can raise
resources by monetising idle government land. In turn, such land can be used
for affordable housing and new projects.
"While India's exports are declining, exports in June itself showing a
drop of over 9 per cent year-on-year, the unabated US-China trade war throws
many opportunities for India, which needs to be tapped.
Higher rate of corporate taxes in India also make Indian businesses
uncompetitive. Reviving private sector capex is also key to the economic
growth. One of the growth drivers would be investment allowance and accelerated
depreciation in green field project. There should be incorporation of
accelerated depreciation system in first year or over 3 years. Tax rebates can
be given for profits ploughed back as investment in new projects, he said.
Though there has been rationalization in the category of goods falling under 28
per cent GST, there are still 33 items which remain in the highest slab.
"It is recommended that the rate of other goods falling under such
category such as cement, consumer durables, automobiles including parts thereof
etc should be reduced to 18 per cent".
The Government is also said to have assured that punitive penal provisions
concerning non-compliance with CSR spending norms under the companies law would
not be pursued.
Piramal said the industry demanded that oversight on CSR spending should not
result in any imprisonment.
Vice-President CII T V Narendran said the government sought views on ways to
further stimulate the country's economic growth. "Across the board, we
discussed the key issues," he said, adding slowdown in the auto industry
would have an implication on the steel sector.
Sandip Somany, President, FICCI, said transmission of cut in interest rate to
consumers by banks is a big issue. "Banks must be encouraged to pass on
the benefits of rate reduction to consumers and borrowers. We are hopeful of
further rate cut. It is encouraging that the RBI has reduced rates by
cumulative 110 basis points," he said.
Goenka strongly advocated setting up a 'development bank' which will support
startup risk capital. He also sought the Finance Minister's consideration on
Accelerated Depreciation on investments as another measure to encourage
investment
Emphasising the immediate need for revival of exports, Assocham president said
there are sectors such as textile and garments, are suffering due to constant
review and frequent changes being brought in tax refunds/incentives schemes.