Union Budget 2013: Will chemical industry get the boost they deserve?
Feb 26 2013, 15:23 | By Moneycontrol.com
The USD 108-billion Indian chemical industry, which represents 3 percent of the global chemicals industry, is estimated to grow at 11 percent annually to reach an estimated USD 224 billion by 2017 if supported by a clear policy roadmap, including fiscal incentives that are in sync with the government's Manufacturing Policy, rollout of the Goods & Services Tax (GST), corporate tax rationalization and a simplified cess and duty structure.
We welcome the Honourable Finance Minister's move to revive the decision to introduce GST without any further delay. While this economic reform will go a long way to streamline growth, it is pertinent to highlight the need for a GST framework that encompasses and absorbs multiple taxes currently levied at the state and local levels.
The industry is passing through a difficult phase in India, with demand growth decelerating during 2011-12 and no major investment on the horizon. Our key expectations from the forthcoming Union Budget are to urge the government to fast track the setting up of chemical parks as charted out in the draft new Chemical Policy to attract faster investments, efficiently meet the demands of the domestic market and generate significant employment. Measures that remain unaddressed and would provide a fillip to the chemical sector are 'zero duty' on the import of chemicals to facilitate easy availability and higher import of cheaper feedstock, tax holidays for small- and large-scale players and a complete waiver of Special Additional Duty (SAD).
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