Punjab reforms on path: Chamber

Praising the Punjab government for its steps towards various reforms, Sushma Berlia, chairperson of PHD Chamber of Commerce & Industry said the state had been able to reduce its revenue deficit to 2.20 per cent, and recorded good industrial production. Planned Investment in the state had also gone up in the last two years.

"During a meeting with NRIs, it came into light that people are keen to know what is happening in Punjab. Time is ripe for the state government to attract investments by taking advantage of the opportunity" she said, adding that although reforms were being done by the Centre as the first step, the state government should also take initiative for second generation reforms in the areas of agri-business, taxation and infrastructure, to attract the investors.

Expressing concern over the complexity in the prevailing taxation structure, Berlia said there was a need to re-write the whole taxation law to make it simple and transparent.

"We have already submitted our pre-Budget memorandum to the finance minister with specific proposals regarding both direct and indirect taxes, with a strong recommendation for re-writing the prevailing taxation law to make it more simple and transparent" Berlia said.

"Though we know that it is a complicated step to re-write the taxation law, since the company law is in the process of re-writing, we must begin work on the taxation law also", she added.

She said the government needed more revenues, which could be made possible by widening the tax net. This year also, the government had fallen short of its revenue-collection target, she said, adding that apart from widening the tax net, there was need to manage the expenditure side, particularly non-planned expenditure.

"Recently, the government has announced the Sixth Pay Commission, despite the fact that the country is yet to recover from the impact of the Fifth Pay Commission," she said. , expressing concern over the proposed impact on the current Budget due to announcement of the Sixth Pay Commission.

When asked her views on the recently passed Income Tax Act, according to which some taxes have been imposed on traders with retrospective effect, Berlia condemned the same and said, "In principle, it is wrong to impose any tax retrospectively when the business community has already made transactions according to the then-prevailing tax rate".

Berlia welcomed the government's decision to implement the value-added tax (VAT), but said some areas were still left to be looked after to make VAT more transparent and more successful.

"Inspite of some disparities in VAT rates from state to state, the idea behind it was good and after certain initial problems, everything will be settled after abolition of Central Sales Tax (CST) as promised by the government", she added.

On Punjab, she said that it was mandatory as per VAT that state government should not impose any other state tax and should immediately abolish octroi to meet the guidelines of VAT.

About the disparity in the tax structure under VAT, Berlia suggested that Northern states should take a lead to ripe out the disparity of VAT under consultation with each other.

Commenting on the WTO negotiations, Berlia said that although India could push back the implementation of GATT for another five years or 10 years but this time should be used to strengthen the domestic industry to prepare it for the upcoming global challenge.

"We must realize the importance of Small and Media Entrepreneurs (SMEs) and develop their skill, ability to market their products by making a concrete and transparent policy" she added.

Asked about his reaction on the recent sanctions of installing 100 Special Economic Zones (SEZs) in the country, Berlia said +mere announcement of establishing the SEZs does not attract investment, unless and until you provide better infrastructure with minimum hindrance of bureaucracy, good employment policy and other facilities like power back up.