New Delhi, June 13 (KNN) The government needs to address the liquidity and manufacturing constraints to boost exports, said Trade Promotion Council of India (TPCI).
While releasing the list of demands as part of the budget expectations, Chairman of TPCI Mohit Singla said, “India is at the cusp of global attention as it’s reputational and business equity has been growing sustainably at global stage. The government needs to address liquidity and manufacturing constraints by increasing the lending cap of the nationalized banks for credit financing and ensure adequate liquidity. The private players including NBFCs may also be allowed.”
He said that the focus on agri-exports and food processing can take India to the position it has been aspiring since long. Also, it has the great potential to address the farm distress and employment generation two issues the country has been struggling in recent times.
With regard to Corporate Tax TPCI has suggested that the corporate tax reduction of 5% may be extended to all entities irrespective of cap. This will also help attract FDI to India.
To boost exports, incentivize the exporters whose geographical diversification is more and not concentrated in terms of outreach and extension product and country wise. Incentivise thrust sectors like furniture and electrical where India has huge competitive advantage to boost exports
Also the government has extended IGST (Integrated Goods and Service Tax) and compensation cess exemptions for goods procurement under certain export promotion schemes till March 31, 2020. This may be thought of a permanent call instead of an extension.
In regard to assistance in setting up the manufacturing plant in foreign country the companies want to tap full potential of their foreign factories. They establish and manage their foreign plants to benefit only from tariff and trade concessions, cheap labor, capital subsidies, benefits of trade agreement and reduced logistics costs. This is going to increase India’s presence in foreign economy, like the Chinese companies are doing in African region and Latin American region especially for MSME.
Tax incentives for companies investing in organic farming including horticulture. Restrict tax concessions to only farm which either do organic farming or export. Tax holiday for five years for companies investing in food processing sector
This budget must address supply constraints to make the export industry competitive, incentives therefore should focus on the supply side of manufacturing. We need to build upon our production capabilities and reduce the trade deficit with competing countries.
Incentives may be given to lead firms in ancillary manufacturing to create an ecosystem from where domestic manufacturing can take place.
Published On : 13-06-2019
Source : KNN India
