‘Excise, interest cuts must to beat slowdown’

Industry body Ficci has sought a cut in excise duties on consumer products in the coming Budget and a reduction in interest rates, besides implementation of appropriate raw material policies to reverse the current slowdown in the manufacturing sector. “While the slowdown is not pervasive and has affected only some sectors, it is a cause for concern. The trend may continue for some time, given the current economic scenario,” the chamber said in a survey on the Manufacturing Sector.

In its recommendations, Ficci has suggested stimulating consumption and demand, reducing interest rates and corporate tax rate, appropriate raw material policies and improved regulatory environment to arrest the slowdown in the sector. “There should also be no further cuts in custom duty on manufactured goods. Further relief package for exporters, increasing rate of depreciation, capacity building of SMEs, skill development and improving infrastructure would help in boosting manufacturing growth,” it said.

With the slackening of demand resulting in a slowdown in growth, Ficci said the government needs to stimulate demand for consumer and industrial products through appropriate fiscal policies. “As an immediate intervention, the forthcoming Budget should reduce excise duties on consumer products, which will stimulate demand,” it said.

“There is a need to create awareness among small manufacturers about benefits of commodity exchange where raw material prices could be hedged,” it added.