Chidambaram advises Government to bring down import duty

NEW DELHI, July 16: The former Finance Minister P Chidambaram advised the government on Thursday to find ways to soften interest rates, w...

NEW DELHI, July 16: The former Finance Minister P Chidambaram advised the government on Thursday to find ways to soften interest rates, withdraw inflationary taxes and reduce import duty on capital goods to retain the competitiveness of the industry in the export market.

Participating in the debate on the Finance Bill, Chidambaram also stressed the need for bringing down expenditure and ending the practice of funding Plan expenditure through borrowings.

He demanded the withdrawal of the four per cent special customs duty on capital goods calling it inflationary and similarly wanted withdrawal of taxes on tractors, tyres and sweetmeat.

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Reminding the Government of the recommendation of the Parliamentary Standing Committee, Chidambaram asked the government to go slow on asset reconstruction committee. Otherwise bankers would become poor lenders and would be tardy in their job, he warned.

Talking about sanctions, he wanted to know about their indirect cost. Rating agencies have started downgrading Indiaand the cost of borrowings was going up, he said and warned that if efforts were not made to soften the interest rates of borrowings, the government’s burden would go up.

He also demanded the withdrawal of the proposal for taking away the tax incentive given to industries which were setting up research and development facilities. While the government notified 125 tax reduction for such indigenous research and development in March last, the government took it away in June, he said. Other members participating in the debate demanded concessions for various units and relief to common people, including raising of income tax limit to Rs 60,000 from the present Rs 50,000.

Akali member Prem Singh Chandumajra advocated the need for raising the income tax limit to Rs 60,000 and also demanded abolition of eight per cent duty on the packed food items.

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CPM member V.V. Raghuvan was critical of the government for bringing the telephone owners under the income tax net and said phone had become a necessity now. Heinstead demanded that those having more than one vehicle be highly taxed.

Sudip Bandhoyopadhaya of Trinamool Congress demanded that the government should place a ban on the agriculture products exports for one or two years in the wake of rising domestic prices.

Congress member T Subbarami Reddy differed with the government view that sanctions would not have any impact. He also said that the industrial growth target of ten per cent was not feasible and forecast it would be around three per cent in the present circumstances.

BJP member Chinmayanand welcomed the proposals including the concessions to the computer industry.