Commerce Ministry Starts Exercise to Firm Up Budget Proposals

The Commerce and Industry Ministry has started the exercise to firm up proposals for Budget 2014-15.

"Budgetary consultations have started. Commerce Ministry participated...On the advice of PMO held a consultative meeting with Dr C Rangarajan to boost the economy," Commerce and Industry Minister Nirmala Sitharaman said in her tweet.

Finance Minister Arun Jaitley is expected to present the Budget 2014-15 in July.

According to sources, the ministry is expected to ask its finance counterpart to resolve the issues concerning inverted duty structure and take steps to revive special economic zones (SEZs).

Imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZs have impacted investments and exports in these zones.

The industry has time and again raised its concerns on the matter and have asked the finance ministry to roll back MAT and DDT.

Inverted duty structure impacts the domestic industry adversely as a manufacturers have to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and costs low.

The Commerce Ministry may also ask the Finance Ministry to announce steps to boost manufacturing sector growth.

Manufacturing, which constitutes over 75 per cent of the index, declined 1.2 per cent in March against growth of 4.3 per cent a year earlier.

During the April-March period of 2013-14, the sector's output contracted 0.8 per cent compared with 1.3 per cent growth previously.

Noted economist C Rangarajan is former Chairman of the Prime Minister's Economic Advisory Council.