Date:19/07/2006 URL: http://www.thehindu.com/2006/07/19/stories/2006071918791000.htm

Tamil Nadu

"Fiscal reforms key to growth"

Special Correspondent

Non-implementation of VAT a constraint, says FICCI survey

High input costs affecting operating margins
Labour laws and tax policies should be simplified

e-governance mode of business operations needed

CHENNAI: With immense growth potential in all major and emerging industries, Tamil Nadu has to make a firm commitment to fiscal reforms, prioritise sectoral programmes and tap its competitive advantages to become India's leading State, according to the Business Outlook Survey (BOS)-2006, conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).

In a release here, FICCI Tamil Nadu council chairman M. Rafeeque Ahmed said almost all the respondents said non-implementation of the Value Added Tax had affected the prospects of the industry in terms of competitiveness and pricing.

About 65 per cent of the respondents felt that the high tax structure and excise and customs duties were among the other constraints.

The high input costs affecting operating margins, congestion and delay in availability of containers for shipment in the ports, inadequate water supply and erratic power were the major bottlenecks that needed to be addressed to ensure better performance during the fiscal.

Among the suggestions made by the respondents to ensure a level playing field and competitive business environment were modernisation of ports, good connectivity and uninterrupted power and water supply.

Implementation of VAT, simplification of labour laws and tax policies and e-governance mode of business operations for speedier and easier transactions had also been recommended.