New Delhi: The government should ensure adequate liquidity into NBFCs, provide investment incentives and cut corporate tax rates for revival in the economic growth and creation of new entrepreneurial opportunities, industry body Assocham has said.
Assocham president Balkrishan Goenka and senior vice-president, Niranjan Hiranandani sought specific measures to address the liquidity issues being faced by NBFCs. “It could be a special window, one-time roll over or any other step. Rushing companies into National Company Law Tribunal (NCLT) because of liquidity shortages is not the solution,” Goenka said.
He added: “We demand 100 per cent depreciation in the first year of new investment. A five per cent cut in the corporate tax will revive investment.”
Talking about the significant potential in India’s tourism sector, Goenka said, “There are more than 1,200 islands which need to be developed with purchasing power parity (PPP) model. These could be handed over to developers for 20-30-40 years to develop the infrastructure for better connectivity. Besides, visa on arrival facility should also be extended to ensure hassle free visit of foreign tourists.”
Certain segments like automobile, construction, housing, NBFCs, aviation and exports are facing rough weather owing to multiple factors and require a delicate handling in terms of policy and fiscal measures.
Along with these measures, the GST Council may be impressed upon for rationalising taxes on vital sectors like automobiles and cement to lower slabs of 18 per cent for demand generation while sectors like jewellery making may be helped with lowering of import duty on gold, as prices of the yellow metal are shooting up in the international market.
Revival of the NBFCs with the help from the RBI and the banks, is key, Goenka said. For boosting consumption demand and investment, the Assocham has made a recommendation for raising the personal income tax exemption to Rs 5 lakh and reduce the corporate taxes to 25 per cent to spur consumption and investment. FDI threshold for some key sectors like defence and insurance may be revised upward or eliminated.
In his remarks, Assocham senior vice-president Hiranandani said: “The sectors like housing, real estate, construction have a huge multiplier effect on the economy, creating millions of jobs, adding immense wealth to the exchequer and lifting the consumer sentiment. So, there is a great expectation from the Finance Minister, particularly with regard to these sectors.”
Hiranandani said the Narendra Modi government had done a commendable work in affordable housing during its first term.
“The focus on affordable housing is expected to continue with further refinement in the scope of the scheme for interest subvention. Besides, the issue of redevelopment of land and making land available in the metro cities for bringing prices in the affordable range would require the urgent attention,” he said. (IANS)