Electrical units seek cautious approach on free trade pacts

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Hyderabad, Feb 18: Continuation of reforms, rationalisation of inverted customs duty structure, domestic tax structure and cautious approach on free trade agreements (FTAs) are among the ten critical issues that need to be addressed by the Union government, according to Indian Electrical and Electronics’ Manufacturers Association (Ieema).

In a pre-Budget memorandum to finance minister P Chidambaram, the association has said that discontinuation of select exemptions to certain sectors, implementation of value added tax (VAT), simplification and rationalisation of service tax structure, simplification of procedures and encouragement to PSUs to procure energy efficient devices and products from domestic industry are some of the important issues for the Centre to look into.

Expressing concern over contradictory statements on the growth of the power sector, Ieema has asked the Union government to continue with reforms in the sector and act according to the commitments made earlier on 40,000 mw addition during 10th Plan.

Reforms need to be continued to attract much-needed investments in this sector and Kelkar committee report on tax reforms also needs to be implemented which would help rationalise indirect and direct tax regimes, streamline policies and procedures, exports and generate new employment, Ieema said.

According to the association, the inverted duty structure has to be rationalised soon in view of increasing competition from across the seas due to FTAs and concessional duty project imports.