GCCI seeks special fund in Union budget for co-op banks

As several co-operative banks in the state have gone bust over the past few years, the Gujarat Chamber of Commerce and Industry (GCCI) has urged the Union government to create a special fund to restore the health of weak co-operative banks in the country.

The demand forms part of a 47-page pre-budget memorandum that the chamber has forwarded to P Chidambaram, Union finance minister on June 5.

"The government has been extending a helping hand whenever a financial or banking institution failed in its obligations towards depositors. A similar mechanism needs to be worked out for the co-operative banking sector also. I hope that the finance minister would look at the pre-budget memorandum in all seriousness and respond positively to the various suggestions," said Shreyas Pandya, president, GCCI.

The chamber has also urged the government to make all efforts to see that the capital market of the country remains buoyant.

Foreign investors should be welcomed and any procedural hurdles coming in the way should be removed, it said.

Some special incentives must be announced for the investors in Initial public offers, the memorandum said.

To have a strong trade policy focus, the chamber has made suggestions to revamp the ministry of commerce and industry and float a new ministry of international trade. The new ministry may devote its entire time towards multi lateral dialogues and strategies, the memorandum said.

The chamber emphasised the need for a uniform tax regime and keeping them at the bare minimum level.

On the issue of labour reforms, it has pointed out the urgent need to create a conducive climate whereby maximum investment is attracted into labour-intensive activities.

Contract labour may also be allowed in the core sector. At the same time, focus should also be concentrated on the development of infrastructure, which has huge potential of generating employment, the memorandum said.

On the high fiscal deficit, the chamber suggested that the tax-GDP ratio needs to be raised. Also there is a need to increase public investment, while cutting down government expenses through downsizing and pruning of subsidies.

The position of public finance is precarious with a debt of nearly 85 per cent of GDP. A viable formula is needed to reduce the ratio of income versus debt and bring it to a reasonable level, the memorandum said.

It has also asked for raising the exemption limit for SSI investment from the current Rs one crore to Rs five crore.