Posts Tagged ‘FICCI’

RBI’s Move to Modify the ECB Guidelines

India Inc cautiously welcomed the RBI”s move to modify the ECB guidelines and said this also indicates a gradual withdrawal of stimulus measures announced to help the industry tide over the global crisis.

However, Ficci said that the RBI”s step may make availability of funds through ECB route more expensive while the ECB route is frequently used by SMEs for raising funds, which are even otherwise available at a high price from the domestic banking system.

Meanwhile, it also said that the relaxation of certain ECB norms given by the RBI during the liquidity crisis period to India Inc have been gradually withdrawn that is an indicator of a gradual withdrawal of the stimulus package.

Further, CII said that RBI”s steps are an indication of slowly unwinding of the liquidity enhancing measures while these measures should not be seen as a precursor to monetary tightening through a rate hike.

On the other hand, the chamber welcomed the central bank”s decision to allow NBFCs exclusively involved in financing infrastructure projects to avail of ECBs.

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Indian Corporates Pitched For a Cut in Interest Rates :)

Softer Interest Rate Regime

Stating that it was essential to maintain the growth momentum, India Inc described 6.8% rise in July industrial output as “evidence of recovery and pitched for a cut in interest rate.

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However, although performance in July has been lower than the previous month, vigorous increase in mining and manufacturing has kept up the level of industrial growth at a reasonable level of 6.8%.

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Additionally, it is said that the industrial economy is passing through a very important stage and FICCI has as a result advocated the need for a softer interest rate regime to assist the overall growth process and promote investments.

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“Although performance in July has been somewhat lower than the previous month…nevertheless robust growth in mining and manufacturing have kept up the level of industrial growth at a reasonable level of 6.8 per cent,” Ficci Secretary General Amit Mitra said in a statement.

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On the other hand, the RBI had cut reverse repo and repo rate by 25 basis points each in April whereas in June, the factory production was revised to 8.2% against 7.8% anticipated provisionally.

Moreover, Assocham stated that in future, the force of stimulus packages would also add on to the revival and India could move on to a close to 6.5% of GDP in the present financial year.

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India’s FDI Inflows Surge in July :)

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The government has revealed that despite a global financial crisis, the flow of foreign direct investment (FDI) to India during the month of July 2009 has been registered at $3.52 billion, impressive 56.5% higher than the $2.25 billion registered last year.

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However, the inflows in July have been against $2.58 billion during the month of June 2009 and $2.10 billion received during the month of May 2009.

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Moreover, it is said that this raise is an optimistic one if the present fiscal situation of India and world is taken into consideration.

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In addition, it is said that a non-profit company will be encouraging FDI into India and this will act in association with the central and state governments as well as the Federation of Indian Chambers of Commerce and Industry.

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On the other hand, the distinctive feature is the partnership between a private sector organization, the Government of India and state governments is unlike anywhere else in the world.

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However, in order to attract more foreign investments, Indian government on Thursday announced formation of a not-for-profit company β€˜Invest India’.

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India Inc calls for investment-oriented budget !

India Inc calls for investment-oriented budget

India Inc calls for investment-oriented budget

In the forth coming Union Budget, which is scheduled on July 6, 2009, India Inc has asked for an investment-oriented Budget, besides demanding a cut in the direct tax rates for boosting the economy.

Representatives of industry chambers CII, FICCI, Assocham and several other industrialists also wanted printing of more currency notes to finance the fiscal deficit, instead of going for market borrowing which squeezes money available for private investment.

In the pre budget consultations with the Finance Minister Pranab Mukherjee, the industry leaders also sought fringe benefit tax removal and also demanded the raising of fund through disinvestment.

“We talked about reducing corporate tax rates a bit… we also talked about bringing down personal income tax rates, if possible. We suggested that income tax exemption limit be raised from Rs 1.5 lakh to Rs 2.5 lakh or Rs 3 lakhs,” FICCI President Harshpati Singhania said.

On the other hand, CII President Venu Srinivasan asked the government to print more currency notes to finance the fiscal deficit.

He also said current borrowings, pegged at Rs 3.6 lakh crore should be monetised, so that private investment is not crowded out, and interest rates do not keep increasing. What we need is significant investment in infrastructure. Money should be raised through disinvestment.

On FDI, Mittal said that it has been the corner stone of reforms and the government should invite more FDI in the country by making investor friendly environment.

He said infrastructure should be given a fillip in every form. Specific to the telecom sector, there should be rationalisation of duty structure, he added.

L&T CMD A M Naik said investment allowance should be reintroduced and income from foreign investment should be exempted from tax.

The industry bodies further said the Budget should also focus on education and skill development apart from moderating corporate tax and raising depreciation rates for plant and machinery from 15 per cent to 25 per cent.