Punjab Newspaper

Infrastructure, inclusive growth, good governance, agriculture, fiscal discipline, financial sector reforms are some of the suggestions put forward by PHD Chamber of Commerce for the first hundred days of UPA government to revive the economic environment . “Roadblocks in infrastructure development need to be cleared to rekindle momentum of growth”, said Mr. R V Kanoria, Chairman of Economic Affairs Committee, PHD Chamber.


First and foremost a uniform definition of infrastructure should be created to clear any ambiguities. There should be simplification and streamlining of procedures to facilitate investment projects. There should be a fixed interest rate on loans meant for developing infrastructure projects. The government should ensure quick approval of resettlement and rehabilitation policy. Other points of importance according to PHD Chamber are expediting the Land Acquisition Bill, preparing a Model Concession Agreements for various sectors, creating a bond market to facilitate access to long term funds. Priority should also be given to providing interest subvention of 2% for infrastructure investments. The creating of a land pool for infrastructure projects by the State Government will greatly boost the infrastructure sector.
To reap the demographic dividend, the government should step up investment in human resources to enhance skill development. There should be a policy towards universal education for India. This is all the more important as China after 2020 will start losing labour force because of tapering population, added Mr. Kanoria.
Health and affordable housing for all should be ensured. For this, the Government should incentivise investments in affordable housing. The Centre should draft a Model Legislation for the housing sector to address the problem of housing shortage of about 20 million dwelling units in both rural and urban areas.
The Government should work towards ensuring food security for all. Priority should be given to control of inflation, especially the spiraling food prices.
To promote Good Governance, Government should draw up a policy for strengthening of police and judicial infrastructure and resume disinvestment through partial sale of equity in non-strategic PSUs.
“Fiscal Discipline has to be inculcated which can start off by initiating subsidy reforms by cutting back on non-merit subsidy such as on fertilizers, substituting food subsidy with food stamps, shifting to market based system of pricing of petroleum and diesel even while reducing subsidies on kerosene and LPG” added Mr. Kanoria.
Financial Sector Reforms should be initiated by bringing pension reform by ensuing early passage of Pension Fund Regulatory and Development Bill (PFRDA).
To stimulate demand and improve the competitiveness in the manufacture sector it is important to reduce total tax burden from around 30% to 25%. The reduction in Excise Duty rate and service tax announced by the Government as part of the stimulus package should be continued beyond March 2009.
The lowering of Corporate Tax Rate to 25% inclusive of surcharge, cess and other levies, abolishing Dividend Distribution Tax (DDT) and MAT and Fringe Benefit Tax would go a long way to revive investments in industry.
External demand can be enhanced by bringing in export competitiveness by providing 100 % tax exemption for exporters having 100 % export turnover and reducing interest rate on rupee packing credit, which is currently between 10-11%, by a minimum of 5%.
Agriculture, which is the backbone of rural development, needs stimulation which can be achieved by stepping up capital investment in agriculture especially in areas like irrigation, watershed development, rural infrastructure, cold chains, research and extension services. A common market for agriculture and providing freedom to farmers to sell their produce wherever they want within the country will help the farmers. Other issues of importance in agriculture are removing curbs on private trade imposed under Essential Commodities Act, abolishing APMC, Lifting stockholding limits, encouraging contract farming and initiating land reform, added Mr. Kanoria.