India Inc urges govt not to raise excise, service tax

Indian corporates have urged the finance minister not to raise excise or service tax till economic growth rate reaches the pre-crisis level of 9%

Concerned over the possibility of withdrawal of stimulus packages in the upcoming Budget, Indian corporates have urged finance minister Pranab Mukherjee not to raise excise or service tax till the economic growth rate reaches the pre-crisis level of 9%, reports PTI.

"We are afraid that rollback of stimulus packages, even partially, could derail the growth process and adversely impact the industrial sector," FICCI president Harsh Pati Singhania told PTI.

The stimulus packages should continue for another year or at least till 31st October, he said, pointing out that the economy is yet to achieve the pre-crisis growth level of 9%.

The finance ministry is believed to be considering partial withdrawal of stimulus given to the industry to combat the impact of the global financial crisis triggered by the fall of financial services firm Lehman Brothers in September 2008.

The Budget is slated to be presented on 26th February.

As part of the stimulus, the government reduced the excise duty in two tranches from 14% to 8% and service tax from 12% to 10%.

Chandrajit Banerjee, director general, Confederation of Indian Industries (CII), while responding to queries send by PTI on withdrawal of stimulus said, "The very fact that we have had the worst financial crisis since 1929, involving the entire globe, reflects that recovery will be slow and enduring, with ample risk of double-dip recession on the way."

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    MF business to get crowded; 23 new players seek SEBI nod

    Almost 23 companies are waiting for an approval from SEBI to enter the MF space which is already overcrowded with 37 players managing assets over Rs7 lakh crore

    As many as 23 companies are awaiting an approval from the market regulator Securities and Exchange Board of India (SEBI) to enter the mutual fund (MF) space, which is already overcrowded with 37 players managing assets over Rs7 lakh crore, reports PTI.

    Companies have filed for regulatory approvals, which are being processed by SEBI, sources said.

    Some of the Indian companies whose applications are with the market regulator include Indiabulls Ltd, Future Finance Ltd, SREI Infrastructure Finance Ltd and ASK Investment Holdings Pvt Ltd.

    Besides these entities, brokerage firms like India Infoline, Prime Securities Ltd, Karvy Stock Broking Ltd and Jaypee Capital Services Ltd have also sought licences from SEBI for asset management.

    Two state-run banks—Union Bank of India and IDBI Bank—are also planning to venture into the asset management space and have approached the regulatory authority.

    While IDBI Bank had filed an application for a licence in June last year, Union Bank had submitted its papers in February 2009.

    Meanwhile, IDBI Bank and the country's third largest private sector lender Axis Bank have already got the regulator's approval to start an asset management business.

    Union Bank has set up an asset management firm with KBC Group of Belgium. The joint venture, in which the state-run lender owns 51% stake, expects to start operations during the current fiscal.

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    After exploration, Videocon Group now plans oil extraction

    The group plans to foray into the oil extraction business from its rigs. It already has a strong presence in the oil exploration business with oil blocks across various countries

    India’s consumer electronics giant and oil & gas exploration entity Videocon is planning to enter the oil extraction business and has received some proposals from foreign players.

    “We are getting some foreign proposals on the extraction side for our oil rigs,” said SM Hegde, director, Videocon Group.

    The group has a strong presence in the oil exploration business, both domestic and overseas. It is currently involved in exploration activities in various oil blocks. It has oil blocks in Australia, Brazil, Mozambique and Turkey.

    Commenting on its oil blocks in Brazil and Mozambique, Mr Hegde said, “For the investments that we have made in Brazil and Mozambique, we are getting a very good feedback, making our investments more viable. Exploration at the Australian oil blocks is also going on, but there is not much indication as to what kind of reserves can be expected.”

    The company also plans to start extraction activities in one of its Brazilian blocks by FY12. “For Brazil we are expecting extraction to start for one of the oil blocks, the Wahoo block, by next year end or by the first quarter of FY12,” he said.

    Mr Hegde also highlighted that in the coming years, the oil & gas segment would be one of the main focus areas for the group. “Power, telecom and oil & gas will be the main focus of the group now,” he added.

    Meanwhile, US-based Anadarko Petroleum Corp, the operator with about 43% paying interest in the Windjammer exploration well in the Rovuma Basin off Mozambique, said that it has reached an intermediate casing point and encountered more than 480 net feet of natural gas pay in high-quality reservoir sands, with a gross column of more than 1,200 feet. To date, this well has tested one of the seven identified play types in Anadarko’s operated acreage off Mozambique. Videocon Mozambique Rovuma 1 Ltd and BPRL Ventures Mozambique BV, a wholly-owned subsidiary of Bharat Petroleum Corp Ltd, hold an 11.75% stake each in the well.

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