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FM urges industry to cater to rising demand and hold price line Print E-mail
Written by Anand   
Thursday, 06 March 2008
NEW DELHI: The Finance Minister, Mr. P. Chidambaram, has advised the Indian manufacturing industry to rise to the challenge of meeting the rising demand for goods and services in the current year and “hold the price line and if possible lower prices” to give a boost to consumption.

He urged industry sectors such as cement, pharmaceuticals, automobiles, and paper, to lower prices, gain in volumes and meet the rising demand this year.

ChidambaramAddressing the National conference on Union Budget 2008-09, organized by FICCI here on 5th, Mr. Chidambaram said: “At a time when agriculture is not growing at the required rate, consumption is flagging, exports are hit by rupee appreciation and there is pressure on oil prices, industry must rise to the occasion and ensure that prices are kept in check.”

Mr. Chidambaram appealed to all the chief ministers to extend their support to the export sector which has been hit, not by volumes or shrinking markets, but by the appreciation of the rupee. “Just as the Central Government reimburses each tax imposed on the export industry, I appeal to all states to do the same in order to give succour to the exporting community,” the Finance Minister said.

Budget 2008-09, the Finance Minister said, seeks to mitigate the woes of the export sector by given direct export benefits. The market stabilization scheme, was in effect, a subsidy to the exporting community, he pointed out.

Mr. Chidambaram said the Budget proposals were aimed at keeping the India growth story in tact. While expressing satisfaction at the growth trends and prospects for the services and manufacturing sectors and investment and consumption during the past couple of years, he expressed concern at the rate of growth in agriculture.

“We have sought to give a fillip to the farm sector, put more money in the hands of the taxpayers, left the peak rate of customs unchanged, and general excise rates. We have lent our support to the export industry. We have raised public expenditure on education, health, roads and allocated Rs 16, 000 crore for the NREGP”, the Finance Minister said, adding that, “I have no doubt in my mind that there will be an upturn in growth this year.”

Speaking about outlays and outcomes, Mr. Chidambaram said that to ensure that the Central schemes are properly implemented and the outlays utilized for the intended purpose, “Mr. Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission and I will sit down and put together an architecture for evaluation of such schemes.” He urged FICCI to take upon itself and evaluate a few schemes.

Mr. Rajeev Chandrasekhar, MP & President, FICCI, pointed out that the global slowdown and the sharp deceleration in manufacturing growth during April-December, was the biggest concern about the certainty of growth. While appreciating measures in the budget like reduction of excise duties and keeping customs duties unchanged to revive the manufacturing sector,he said : “We believe what is also needed is a lower interest rate regime by either allowing more access to ECBs or a simpler lower rupee regime. This, he said, was logical given the low interest rate regime currently prevailing globally.”

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