Pre-budget recommendations call for capacity creation in knowledge, infrastructure, technology.Byline: ANI
New Delhi New Delhi (dĕl`ē), city (1991 pop. 294,149), capital of India and of Delhi state, N central India, on the right bank of the Yamuna River. , June 1 (ANI): CII's Pre-Budget Memorandum, presented to the Ministry of Finance, recommended that Budget 2009-10 should be an 'Investment Budget' to enable India to deal with the global economic crisis.
Action would need to be taken on fiscal prudence, capacity creation, promoting investments and fuelling consumption, stressed the Memorandum, adding that external forces are unlikely to provide a facilitative environment for India's economic growth in the near future, and that the impetus for the economy would need to originate internally.
Notably, recognizing the stress on fiscal situation, CII CII Confederation of Indian Industry
CII Chartered Insurance Institute (UK)
CII Construction Industry Institute (University of Texas)
CII Council of Institutional Investors has not called for lowering of key excise and direct tax rates. Instead, it emphasizes that India needs to undertake large 'Innovative India' investments in physical and social infrastructure that would accelerate internal growth momentum, so that Gross Capital Formation in Infrastructure reaches 11 percent of GDP GDP (guanosine diphosphate): see guanine. by 2011-12. Further, an infrastructure monitoring and implementation agency needs to be set up to raise efficiency of expenditure, suggested CII.
The CII Memorandum additionally emphasized promoting investments by sending a clear message to investors that India's tax policies are consistent and have continuity. Investment allowance should be re-introduced to encourage front-loading of investments. However, to simplify and streamline the tax structure, CII suggests that surcharges, cesses, FBT FBT Fringe Benefit Tax
FBT Flyback Transformer
FBT Fused Biconic Taper (fiber optic connector)
FBT Floridians for Better Transportation
FBT Fire Boat
FBT Functional Board Test
FBT Feedback Technology
FBT Fruit Basket Turnover and MAT should be abolished.
To fuel domestic consumption as a growth accelerator, the CII Memorandum calls for easing individual tax exemption limits by a further Rs 50,000 and removing retirement fund limits. It suggests that limits allowed under section 80C to Individuals and HUF HUF
In currencies, this is the abbreviation for the Hungarian Forint.
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. should be raised to Rs. 2 lakh lakh
(in India) 100 000, esp. referring to this sum of rupees [Hindi lākh]
Noun 1. lakh - the cardinal number that is the fifth power of ten
100000, hundred thousand , provided the additional Rs. 1 lakh savings is in infrastructure bonds.
The Budget should also continue the focus on education and skill development, which have been highlights of previous Budgets, stressed CII. In particular, allocation for the National Skill Development Corporation could be increased to kickstart new initiatives for youth. In addition, technological capital needs a boost through increasing the R and D expenditure to at least 1 percent of GDP. To encourage companies to undertake in-house scientific research and commissioned R and D, the weighted deduction of 150 percent of the expenses incurred on scientific research should be extended to all sectors for a further period of at least 10 years.
CII suggests that additional public funds for these initiatives could be mobilized through disinvestment Disinvestment
1. The action of an organization or government selling or liquidating an asset or subsidiary. Also known as "divestiture".
2. A reduction in capital expenditure, or the decision of a company not to replenish depleted capital goods.
1. in select PSUs, attracting foreign exchange by issuing sovereign-backed bonds, and widening the tax base as well as maintaining the pace of efficiency in tax collection. The Government could consider setting up a task force for examining widening of the tax net for corporates and individuals without increasing the tax burden on existing assessees. Tapping of black money in the economy as well as overseas needs to be addressed, while redirecting non-merit subsidies to productive investments for asset creation could also be considered, added CII.
The key direct tax recommendations of the CII memorandum include increasing depreciation rates for plant and machinery from 15 percent to 25 percent, and introducing an Investment Allowance package for businesses for cost savings. For export units, removal of sunset clause for STP STP or standard temperature and pressure, standard conditions for measurement of the properties of matter. The standard temperature is the freezing point of pure water, 0°C; or 273.15°K;. units under section 10A and EOU (character, humour) EOU - The mnemonic of a mythical ASCII control character (End Of User) that would make an ASR-33 Teletype explode on receipt. This construction parodies the numerous obscure delimiter and control characters left in ASCII from the days when it was associated more under section 10B is suggested. Credit Linked Subsidy Scheme (CLCSS) for Technology upgradation for MSMEs needs to continue and be extended for all possible technical upgradations / modernisations
The CII memorandum also suggests that an alternative dispute redressal mechanism be established at the earliest. Any anti-avoidance measures to prevent abuse of tax treaties, which involve changes in existing tax basis or positions, should be made effective prospectively after giving sufficient lead time for the company to exit.
On the indirect taxes front, the CII memorandum strongly stresses that Goods and Services Tax The Goods and Services Tax is a Value-added tax that exists in a number of countries. Please see:
Greenwich sidereal time
GST (in Australia, New Zealand, and Canada) Goods and Services Tax , CST CST
1. Central Standard Time
2. convulsive shock treatment
CST Central Standard Time
Noun 1. rate should be brought down to 1 percent.
Further, there should be no change in peak customs duty at 10 percent, given current global economic slowdown. The CII submission recommends reduction of customs duty from 5 percent to NIL on non-coking coal, petroleum coke and scrap of copper, zinc and lead, reduction of customs duty from 5 percent to 2 percent on naptha and liquified propane and reduction of customs to NIL on inputs used for manufacture of orthopedic implants.
The CII memorandum also calls for continuation of 8 percent excise duty in general and reduction of excise duty from 16 percent to 8 percent on medicines covered under Medical and Toilet Preparation (M and TP) Act. Service tax payment in case of comprehensive annual maintenance contracts should be simplified by charging on a specified percentage value of the contract. (ANI)
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