Capital goods industry pressed the need for extending 150% weighted deduction for R&D expenditure beyond one year. At the interactive session with the minister for heavy industries Vilasrao Deshmukh the industry representatives argued that the government should consider extending this deduction to a longer period than the proposed one year, as R&D has long gestation period and important for enhancing the technological edge of the industry. The session was organised by the Confederation of Indian Industry (CII).
The industry representatives also called for according infrastructure status to the power sector. They also suggested that a task force be set up with a time bound programme to take up the long pending concerns of the industry. Moreover, the industry also made a strong pitch for abolition of octroi.
In his response, Deshmukh assured the industry representatives to take up the matter relating to extension of weighted deducition beyond one year with the finance ministry.
Earlier, the minister said the capital goods sector, which grew at a rate of 18% during 2007-08, registered a growth of 7% only in 2008-09. The capital goods customers are rescheduling their order and postponing the acceptance of deliveries, which is a cause of concern for the sector. He however reiterated that his ministry would support the industry in the current situation so that it can help Indian manufacturing industry to meet the challenge of global competition and sustain the growth momentum in exports.
He outlined number of initiatives already taken up by the government for sustained and inclusive growth of all the sectors. ?To provide long term financial assistance to infrastructure projects, the government has already set up India Infrastructure Finance Company Limited, which will refinance 60% of commercial bank loans for PPP projects in critical sectors?, highlighted Deshmukh.
SN Dash, secretary, heavy industries said that the industry seems to have bottomed out which is evident from the recovery in the auto sector. Referring to the issue of second hand imports affecting the industry, he said that the matter has been taken up with the Planning Commission and some decision could be evolved to the satisfaction of all concerned.