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Saturday, October 31st, 2020

Focus on manufacturing sector reforms, GST, enhancing employment opportunities : PHD Chamber

Dalip Sharma, Regional Director, PHD Chamber.INVC, Chandigarh, “Manufacturing sector reforms should be at the top of the agenda of the new government to enhance its growth and productivity to generate millions of employment opportunities in the economy. State of the art infrastructure, hassle-free environment clearances, reforms in the labor laws, special attention to the MSMEs sector would be critical to increase the manufacturing share in GDP to 25% from the current level of 16%, said Dalip Sharma, Director, PHD Chamber of Commerce and Industry. Implementation of GST would be critical to remove the cascading impact of indirect taxes on economy and to create a common market across the country. GST has the potential to increase India’s GDP by 2 percentage points, he said. Laying stress on the need to preserve the agri-produce, Sharma said, “Increase in agricultural productivity by providing good quality agriculture-infrastructure to improve supply-chain scenario, augment storage facilities and minimizing wastages would be critical to sustain growth trajectory in the coming times.” Citing quality of higher education and skill sets to be critical to bring more and more of our human resources in the production chain, Sharma said, “Skill development is essential to execute the various infrastructure projects which have been stuck up because of skill deficiency in the economy. The industry is also facing an acute shortage of skilled manpower.” Reforms in the energy sector are needed not only that the sector is  critical for achieving double digits GDP growth rate but also for improving the quality of life since some 600 million people in India do not have access to electricity added Sharma. Rajiv Bali, Chairman Punjab Committee, PHD Chamber said, “It is not tax rate but the number of tax payers which needs to be much increased.  Simplification and rationalization of provisions will promote this objective.” PHD Chamber of Commerce and Industry has appealed to the Finance Ministry to raise the limit of medical reimbursement for salaried persona to a minimum level ofRs.50,000 as also hike the deduction ceiling of interest on housing loan to a minimum of Rs.5 lakh per annum, besides raising the present income tax limit for taxation purpose to Rs.2.5 lakh per annum. The limit for medical reimbursements for a vast majority of working class stand atRs.15000 per annum under Section 17 of Income Tax Act 1961 for years and now needs to be revised at Rs.50,000 in view of persistently rising inflation and high cost of medical expenses. Similarly, the ceiling of interest on housing loan has not been revised for quite some time which stays at Rs.1.5 lakh per annum and now urgently needs to be reviewed, keeping in view the rising property prices followed by high rates of interest rates coupled with increasing inflationary pressures. Talking about the corporate taxes, Vikram Sahgal, Chairman, Chandigarh Committee, PHD Chamber said, “To rationalize and reduce corporate tax rates to 25% to make it competitive with other dynamic countries. The income tax slabs need to be much enhanced keeping in view fall in value of rupee and rates/slabs of other countries.  Much higher slabs for different levels of income are proposed in DTC. Surcharge and cess which was a temporary levy, need to be removed. Rationalizing the tax burden would encourage voluntary compliance and lead to higher revenues.” Direct Tax Code after thorough review, needs to be urgently implemented to provide certainty and desired changes in the Act at an early date, said Sahgal adding that MAT rates increased from 7.5% to 18.5% over a period have hit corporate outflows and result in defeating the provisions of deduction, exemption etc. of the Act.  MAT needs to be reduced to maximum of 10%. Tax slabs, deductions and exemptions should be indexed for inflation.

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