NAGPUR: With the Budget just a day away, the key demand remains that consumers should be made richer to spur the economy. The business sector wants fiscal measures to allow more funds in the hands of the consumer to mark the Union Budget 2009. It is this disposable income that the trade and industry insists, will give the much-needed booster for the economy.
There have been suggestions as diverse as increasing income tax threshold to introducing further cuts in indirect taxes. All such measures would increase buying capacity while also making goods cheaper.
Retailer Girish Mulani pressed for easing of income tax, as well as allowing foreign direct investment into the retail sector. Mulani said this would not only create employment opportunities, but competition would make the prices attractive for consumers. Citing the case of China, he said exports should get substantial government support. He said garments of superior quality are cheaper by 50%-70% in China as compared to the India due to mass production backed by the government.
Vilas Kale, who has a stake in jewellery and automobile businesses, said the government must increase allocation into the infrastructure sector, which would in turn create employment and earnings which would spur expenditure. Tourism should also get a boost for similar reasons, and bottlenecks in the logistics channel should be removed, he added.
There has been a major demand for reducing the service tax too. The levy is keeping consumers away from organised retail stores. "Many prefer to purchase goods from the grey market on account of the service tax factor, and ultimately the money spent does not flow into the economy. A reasonable cut in the service tax can spur consumerism and help the organised retail sector," added Umesh Patni, an automobile dealer.
Another demand was to keep the income of IT professionals high. "It was the IT money which spurred the retail business of the country leading to a real estate boom too. With the sector taking a hit big time, there has been a cascading impact on both retail and realty business," added real estate developer Vijay Kumar. He added that the spending capacity of the highly paid IT professionals led to the huge investment in the retail sector, which in turn led to a spur in the real estate activity also. Kumar also advocated support for the banking, finance and insurance sectors too, as the employees in this sector were also part of the high-spending category, Kumar added.
Kumar also called for extending the tax exemption to export-oriented software software units by another 10 years. "The sop is expiring in 2010. Renewing it would make software business in India a little more profitable. There should be similar sops for the domestic IT industry too, especially by doing away with the service tax," he said.
Source:The Times Of India