CII urges timely VAT launch in pre-Budget memorandum

In its pre-Budget memorandum for small industry, The Confederation of Indian Industry has said to meet international competition in a planned manner, small industry will have to take a more global outlook.

Emphasising the need for the implementation of the value-added tax (VAT), easier and cost effective availability of steel, undertaking reforms in the direct and indirect tax structure, the CII memo recommended a more support-based policy framework, that would speed up deregulation, decontrol, transparency as well as streamline reforms in this sector.

Highlighting CII's initiative in facilitating the formulation of the Small Enterprises Development Bill, the memorandum strongly advocates the enactment and implementation of the relevant Act.

This will simplify to a great extent the operations of a small enterprise, as well as provide the entrepreneur with spare time and resources, which in turn shall translate into higher productivity and better efficiency.

According to CII, though a majority of Indian states have drafted and modified the VAT Act for their respective states, the country is not yet close to its implementation.

CII has stressed that the Budget for 2004-05 must clearly state the target date for the implementation of VAT, and the date should not be beyond April 1, 2005. The CII has also recommended a rationalisation of the duty structures.

The CII also said the creation of the Rs 10,000 crore Small Industry Development Fund was the need of the hour.

However, CII has further emphasised that the fund should be made operational by the Small Industries Development Bank of India, to ensure that the benefits percolate to the entire Indian small industry.