CFOs push for common tax

Companies seek better infrastructure

Chief Financial Officers of a dozen leading companies including Tata Motors, Grasim, ITC and Bharat Forge today asked the government to work towards a common goods and services tax (GST) after the introduction of Value Added Tax.

The demand for a GST was made by corporates to address the problem of cascading effect of taxation.In the first interaction of CFOs with Finance Minister P Chidambaram, issues pertaining to the existing climate for investment, external environment, exchange rate and capital markets was dicussed. The Finance Minister has called another meeting with the CFOs on issues relating to taxation in October.

While there were no apprehensions regarding the interest rate regime or the exchange rate, nearly all corporates sought improvement in the investment climate through infrastructure development, ensuring easy access to fuel and mineral ores and financial reforms.

Corporates also made a case for strengthening the Non-Banking Financial Corporations including allowing them to raise money for market and access to cheaper sources of capital.

Speaking to reporters after the meeting Economic Advisor Ashok Lahiri told reporters that the CFOs pitched for a better intellectual property right regime to lure more foreign investments in the knowledge based industries.

"It was pointed out that the productivity has gone up and the scope for further productivity improvement is limited so fresh investment in capacity is required," Lahiri said adding that a host of sectors like auto, auto components, agro-based industries, pharma, tourism and hotels were poised to witness major investments in the years to come.

Lahiri said that the CFOs also highlighted the need to step up rural credit as a pre-requisite to foster industrial growth. "The finance minister has always said that rural credit was one of his priority areas. Industry will grow better if rural credit increases."