Ficci calls for reforms through executive action

With the Budget session set to start from February 23 and the Opposition not agreeing with the government on major issues, the Federation of Indian Chambers of Commerce and Industry (Ficci) has suggested a slew of urgent reforms across sectors, which will not require legislative action.

The proposed reforms are spread across exports, taxation, and crucial sectors such as small scale, labour and infrastructure. According to Ficci, most of these reforms can be addressed by executive action by the respective ministries.

To boost India's lagging merchandise exports, which went down for the 14th consecutive month in January, Ficci has suggested simplifying the process by which exporters can claim incentive benefits. While the government has sought to incentivise exports through interest subvention and the merchandise exports from India scheme (MEIS), exporters have claimed several procedural and implementation difficulties to have made it unusuable.
 

The suggested reforms include increasing the time period allowed to exporters to claim MEIS benefits as well as for manually submitting the shipping bill. Allowing exporters to self-certify the origin of various goods, which usually take a considerable time, has also been mentioned.

In labour laws, Ficci has proposed a uniform period of five years across states after which factory licences are required to be renewed. Currently, the period ranges from one to five years.

It has also recommended fixing a three-year time limit to decide pending cases by the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies Act, 1985, which has pending cases stretching back to 15 years.

Under the Employees Provident Fund and Employees State Insurance Acts, it has suggested placing a cap on the time duration of records summoned by the inspector for inspection for up to three years before.

It also urged the government to divest its stake holding in central public sector undertakings, especially mentioning Specified

Undertaking of the Unit Trust of India, where it said the Centre holds equity to the tune of Rs 52,000 crore or 0.4 per cent of the GDP.

To secure urgent infrastructure growth, the setting up of a one-stop shop for handling projects coming up under the public-private partnership mode has been recommended. While the government had announced setting up of an institution called '3P India' in 2014, the body has still not been set up.

Ficci has also called for introducing binding statutory timelines for adjudication of matters relating to indirect taxes. It said the uncertainty in such cases make doing business difficult especially for small and medium enterprises. Currently, the Customs Act states tax officials shall have to determine the amount of such duty within one year from the date of notice.

"A provision be made each in the Customs, Central Excise and Service Tax laws that in case a show-cause notice is not adjudicated upon within a specified period from the date of issue, the proceedings shall lapse as if the show-cause notice was never issued," said Ficci.

On cheap steel imports flooding the domestic market, it has argued for instituting anti-dumping norms and suggested import duty on all steel products should be raised to 25 per cent in the upcoming Budget. It has also called for the customs duty on all steel products be immediately raised to 15 per cent. Currently, the duty on import of long steel ranges from 10 to 12.5 per cent across categories.

The suggestions have been submitted to the Department of Industrial Policy & Promotion.