By IANS,
New Delhi : The Associated Chambers of Commerce and Industry (Assocham) Wednesday called on the government to bring down tax on household purchases to less than 20 percent from over 45 percent now to spur domestic demand.
“Although the annual income of an average Indian is growing significantly, it is not resulting in increased savings because the government takes away over 45 percent on household purchases in terms of indirect taxes alone,” Assocham president Sajjan Jindal said in a statement.
The growth in private consumption expenditure, currently at around 6.5 percent, should be taken to 7.5 percent to boost demand, he added.
Assocham has also devised a 10-pronged strategy to achieve 12 percent manufacturing growth this fiscal.
The suggestions, submitted to the finance ministry by Jindal, includes withdrawing hurdles on investments in power, telecom and other core infrastructure sectors by way of giving them necessary clearances within maximum 45 days and easing regulations for the small and medium enterprises (SME) sector.
Government controls and several regulations are currently restricting the growth of the SME sector, which contributes to half of the country’s manufacturing output, the industry lobby said.
“In the industrial production, the weightage of manufacturing is the highest and naturally it is a matter of concern that neither our industry nor manufacturing is doing as per expectations,” it added.
If the manufacturing sector has to grow 12 percent a year, power generation must have a sustained annual growth of 10 percent, said Assocham.