Ficci Makes A Pitch For Domestic Companies

The Federation of Indian Chambers of Commerce & Industry has said that the government should encourage domestic companies to become internationally competitive by facilitating restructuring through mergers, amalgamations, expansions and closures.

In its pre-budget memorandum, the chamber has said that 100 per cent subsidiaries of foreign companies should not be allowed to operate in competition with existing joint ventures and has called for a freeze on import duties at for a certain period.

The policy on foreign direct investment, says the chamber, needs to be made more transparent and should give FDI a dominant role in the infrastructure sector, leadership role in export sector and supportive role in others. Hostile takeovers, it says, should not be allowed and the existing rule of getting the boards permission be maintained.

 

The memorandum also suggests to revitalise housing and urban development, boost the savings ratio, induct dynamism into the agriculture sector, kick-start industrial growth, revitalise small-scale industries, enhance exports, streamline distributive trade, bring momentum in the infrastructure sector and tone up the financial sector, including insurance. The chamber has also put emphasis on social sectors, specially education.

Ficci has said that public sector savings can be increased by 3-4 per cent through improved performance, disinvestment of government stake, sale of loss-making units and amendments to certain laws like Sick Industrial Companies Act and Urban Land Ceiling Act. Regarding the SSI sector, it has suggested a technology mission to help in accessing relevant technology and a separate fund at the national level to support them in absorbing technology transfer costs and sponsor R&D.

The exim policy, it says, should provide support or incentives (in progressive form) to encourage export of value-added, indigenous-material-based and labour-intensive exports. Another suggestion is to set up a trade development finance corporation with a fund of $2 billion from foreign exchange reserves and borrowings from foreign money markets.

On distributive trade, it says India should be made a common market by removing inter-state restrictions. On the road sector, a green card system for loaded trucks/containers to move without checking en-route has been suggested. Regarding the petroleum sector, Ficci says an accelerated programme for exploration with an estimated investment of over $2 billion should be initiated. There should also be a move towards market determination of prices of all petroleum products, which entails phased reduction in subsidies.

On taxation, the chamber says MAT should be withdrawn or at least deduction permission under section 80HHC and 80-O should be excluded from its purview. The chamber has also called for industry status for housing and urban development. All benefits enjoyed by industry and foreign investment should be extended to real estate, says Ficci.