In the context of volatile economic situation, CII Association Council to review the economy and industry performance and discourse on pre-budget memorandum. Dr Subir Gokaran, Deputy Governor, Reserve Bank of India, has revealed his concern about growth and inflation risk. Though in July the inflation has slightly slipped down to 6.8 from 7.25 he branded the Indian market as the only emerging market where growth has come down but not the inflation. He also expressed his concern about the credit growth at 17-18 per cent y-o-y against the deposit growth at 14 per cent y-o-y. The composition of the different components of the policy and flexibility will do the trick he asserted. He said that RBI is working towards inflation management without much compromising on the growth. Satya Poddar, Partner, Ernst & Young was of the view that stagnation of GST is the mix of both political and economical. He stated that compromise on the fundamental factors has made GST not much worthy. He is of the opinion that GST is a replacement, in terms of restriction and deletion of existing taxation power, and not a new power given to the states which is causing dissention. His concern is also about keeping real estate, petroleum, electricity and alcohol out of scope of GST. He recommended that GST should be re-written and be made elective provision rather than a mandatory provision. Dr Ajit Ranade, Group Chief Economist, Aditya Birla Group strongly came down on the proposal of GAAR (General Anti-Avoidance Rule, which he feared will cause numerous litigations and corruptions. He specifically called GAAR as an idea before its time and proposed that it should be deferred by 3-5 years. A detailed study should be conducted before the actual implementation and approving panel should be empowered not an advisory body, he proposed.
The council’s members suggested some proposals for the Union Budget 2013-14 to S. Gopalakrishnan, the chairman of the council, which includes import of second-hand equipments should be banned; import from China, especially for plastic scrap and electronics, gadgets there should be blanket ban; import of energy-efficient equipments should not be taxable; for IT, value addition is merely 10-12 per cent, whereas it should be 40 per cent; import duty on cement is nil and there won’t be level-playing field once Pakistani manufacturers foray into the market; medical equipments are mostly imported so local manufacturers must be encouraged and incentivised to take up the challenge; and the increase of excise duty to 12 per cent from 10 per cent is actually hurting the business investors, hence an amendment is required.