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78th Annual
General Meeting
December 24, 2005, New Delhi
PM promises India
Inc. New Year gift
December 25, 2005, Economic Times
As a new year bonanza for India Inc, Prime Minister
Manmohan Singh on Saturday said he would address corporate
India's tax concerns in the forthcoming Budget and generate
consensus on labour law reforms. In reply to corporate
India's concerns over high incidence of direct tax,
the PM said, "I will look into the matter",
at the annual general meeting of Ficci.
The Prime Minister , earlier in his speech, mentioned
that the country is moving towards lower tariffs, uniform
tax rates and easier procedures. "We will also
work to improve the tax administration in the country
so that your interface with the tax system is pleasant,
smooth, problem free and conducive to easy tax compliance,"
he added.
Stressing on the government's plan to encourage private
and public partnership, the Prime Minister said the
government was committed to 'unleash a new surge of
investments' by encouraging enterprise and creativity
through reforming the public sector. "If it requires
modifications to our labour policies to provide greater
flexibility, which in turn will generate more jobs,
we will work with all stake holders to generate a consensus
on it," he said.
http://economictimes.indiatimes.com/articleshow/1345150.cms
Govt will address India Inc's concerns over tax burden:
PM
December 25, 2005, The Hindu Businessline
THE Prime Minister, Dr Manmohan Singh, has promised
to address, over the next year, the concerns voiced
by corporate India over the high direct tax burden.
Delivering the inaugural address at the 78th Annual
General Meeting of the Federation of Indian Chambers
of Commerce and Industry (FICCI) here on Saturday, Dr
Singh said, "Many of you have concerns about the
tax system. Over the last two years, we have moved towards
lower tariffs, uniform tax rates and easier procedures.
There are still some concerns, which Mr Kanwar (the
FICCI President) has voiced. I promise to address these
concerns over the next year."
The outgoing FICCI President, Mr Onkar S. Kanwar, had
said in his address that the unusual growth in the proportion
of tax burden on Indian corporates was dampening the
much-needed investments. He pointed out that corporate
India's direct tax burden stood at over 40 per cent
and sought the Prime Minister's intervention in this
matter.
"Corporate India today pays 30 per cent corporate
tax on its profits. Another 3 to 4 per cent as dividend
distribution tax and another 3 to 4 per cent on Fringe
Benefit Tax raise the burden. We strongly feel that
FBT must be abolished," he said.
The Prime Minister also assured the corporate sector
that the Government would work to improve the tax administration
to ensure that the industry's interface with the tax
system is "pleasant, smooth, problem-free and conducive
to easy tax compliance."
In his address, the Prime Minister expressed hope that
India would become a genuine common market in the next
3-4 years. For this purpose, he underscored the need
to move towards greater rationalisation of VAT and CENVAT
(Central Value-added Tax) rates and more importantly
towards common goods and service tax.
Stating that the Indian economy needs a massive dose
of investments in the foreseeable future, the Prime
Minister said that the next decade must be a decade
of investment for India. "This investment should
convert India into a first-rate agricultural, industrial
and service economy. At the core of this is transformation
of our manufacturing sector," he said.
Dr Singh called for increasing the share of manufacturing
in the national income to a range of 30 per cent to
35 per cent. "This requires manufacturing to keep
growing at 12 per cent to 14 per cent in the next decade.
An economy of our size and scope cannot ignore the manufacturing
sector," he said. He expressed concern that the
share of manufacturing in the national income had only
shown a marginal improvement from 15.8 per cent in 1991
to about 17 per cent in recent years
http://www.thehindubusinessline.com/2005/12/25/stories/2005122502570100.htm
PM moots CMs' panel for power
reforms
December 25, 2005, The Financial Express
Prime Minister Manmohan Singh on Saturday exhorted
India Inc to brace up for a sustained 14% growth in
manufacturing sector. He also proposed setting up an
Empowered Committee of chief ministers to expedite power
sector reforms.
Expressing concern over the marginal improvement in
the share of manufacturing in national income from 15.8%
in 1991 to 17% in 2003, he said this should be in the
range of 25% to 35%.
Addressing the 78th Annual General Meeting of the Federation
of Indian Chambers of Commerce and Industry (Ficci)
here, he indicated that tax reforms would be carried
further in the forthcoming Budget. He said the tax system
in the country needs to move towards greater rationalisation
of VAT and CENVAT systems, and most importantly, towards
a common goods and services tax.
Expressing concern over the anticipated slippage on
12,000 MWs of new power generation capacity, the Prime
Minister stressed upon improving distribution systems
and cutting thefts and losses. There should be competitive
supply and better revenue collection mechanisms in the
power sector, he said.
"I am going to propose to our Chief Ministers to
forge a similar all-party consensus (as in the case
of VAT) in the power sector," he said.
The prime minister unfolded his vision of an Asian Economic
Community, built on the plank of a pan-Asian Free Trade
Agreement, the "third pole" of the world economy
after the EU and NAFTA.
"The decade before us must be a decade of investment
which should convert India into a first rate agricultural,
industrial and service economy," the prime minister
said.
Empathising with the theme of the Ficci AGM, 'India's
Promise in the Asian Century: Architecture for an Emerging
Giant', the Prime Minister said that "the 21st
century will be an Asian century and India must have
a major role in making that happen".
Notwithstanding opposition from the Left, the prime
minister hinted that the government would work towards
providing more flexibility to the labour market. He,
however, said that a consensus approach would be adopted
to move forward in this 'crucial' area of reforms and
after putting in place a sound social security net.
http://www.financialexpress.com/fearchive_frame.php
Manmohan Singh hints at tax, labour
reforms
December 25, 2005, The Hindustan Times
Hinting at tax reforms during the next fiscal year,
Prime Minister Manmohan Singh on Saturday assured the
industry of better tax administration as he unveiled
plans for Rs 60,000 crore investment in the port sector
and Rs 40,000 crore for modernisation of airports in
the country.
Responding to demands of FICCI President Onkar S Kanwar,
to address the high direct tax burden on corporate India
and the need for raising the level of 30 per cent income
tax to incomes of above Rs 5 lakh, the Prime Minister
said: "I promise to address these concerns over
the next year."
Singh who was speaking on the 78th Annual General Meeting
of FICCI, said he would work towards generating a consensus
on labour reforms.
The Prime Minister said the government was committed
to 'unleash a new surge of investments' by encouraging
enterprise and creativity through reforming the public
sector and enabling private and public partnerships.
"If it requires modifications to our labour policies
to provide greater flexibility, which in turn will generate
more jobs, we will work with all stake holders to generate
a consensus on it," he said.
Singh said there was also a need to pay attention to
social safety nets because it was incumbent on the state
to take care of the weak and vulnerable for those who
cannot bear the shocks of market economy.
"Social welfare legislation must go hand in hand
with labour market flexibility. This will help increase
employment opportunities while taking care of employees'
concerns," he said.
On concerns about the Indian tax laws and tax system,
the Prime Minister said over the last two years, the
economy had moved towards lower tariffs, uniform tax
rates and easier procedures.
He told the industrialists that the government would
work towards improving the tax administration in the
country so that "your interface with the tax system"
is pleasent, smooth, problem-free and conducive to easy
tax compliance.
On demands for improving the power situation in the
country, Singh mooted setting up of Empowered Committee
of Chief Ministers.
He said it would be desirable to initiate speedier process
in the case of power sector policy reforms as compared
to the VAT process, which though worked well, took time
to arrive at a consensus.
http://www.hindustantimes.com/news/181_1581395,0002.htm
Manmohan hints at tax, labour
reforms "We are on the threshold of the Asian Century"
December 25, 2005, The Hindu
NEW DELHI: Prime Minister Manmohan Singh on Saturday
nudged India Inc. to adopt a forward-looking approach
in preparing for global competition and leverage opportunities
for targeting a 25-35 per cent share of manufacturing
sector in national income as he promised a new surge
in investment, improvement in tax administration and
labour reforms for grater flexibility.
He was speaking at the 78th Annual General Meeting of
the Federation of Indian Chambers of Commerce and Industry
here.
"We will continue to do whatever is needed to remove
the constraints of domestic enterprise. We are in exciting
times. We are on the threshold of the Asian Century.
We will work with you and walk with you in this journey
of creativity and enterprise," Dr. Singh said.
With "very positive" business confidence being
reposed in the economy, he said the decade ahead must
be turned into one of investment to convert the nation
into a first rate agricultural, industrial and service
economy.
The Prime Minister said the Government would be mindful
of the interests of domestic industry even as the economy
integrated with global business. And while encouraging
enterprise and creativity and reforming the public sector,
modifications would be made in the labour policies,
if required, through consensus generated by stakeholders,
he said.
Social welfare legislation must go hand in hand with
labour market flexibility, he said. "This will
help increase employment while taking care of employees'
concerns."
Referring to concerns voiced by outgoing FICCI chief
O. S. Kanwar about tax laws and tax system, he said
the country had moved towards lower tariffs, uniform
tax rates and easier procedures. Over the next year
tax administration would be improved, making interface
with the tax system as pleasant, smooth, problem-free
and conducive to easy tax compliance.
Expressing satisfaction over the progress of the VAT
system, Dr. Singh said revenues had been buoyant setting
at rest worries about its feasibility.
"We need to move towards greater rationalisation
of VAT and CENVAT rates, and most importantly, towards
a common goods and services tax. This would enable,
in the final analysis, India into becoming a genuine
common market, a dream of the founding fathers of our
Republic", he said, hoping that it would happen
in the next 3-4 years.
http://www.hindu.com/2005/12/25/stories/2005122513360100.htm
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